Finance guarantee scheme falls short

Commenting on Friday's report by the Business and Enterprise Committee report on the Enterprise Finance Guarantee scheme, Julian Rose, head of asset finance at the Finance & Leasing Association, said:

"The Enterprise Finance Guarantee scheme is still not working for many small businesses. If the scheme is to make a significant difference to businesses that need the most help it must be extended to include asset finance. A third of small businesses rely on specialist lenders to provide asset finance, such as hire purchase and leasing. Asset finance is an obvious option for the Enterprise Finance Guarantee scheme because it is economical, flexible and offers certainty because finance is provided for a fixed term.

"Small businesses are increasingly concerned about cash flow, and demand for access to credit for SMEs is set to increase as firms are no longer able to survive without new finance. Last year, asset finance provided 750,000 SMEs with £15 billion of essential business equipment ranging from delivery vans to photocopiers. Our economic recovery depends on schemes, such as the Enterprise Finance Guarantee, giving small businesses a range of finance options, including asset finance."