CFI: Commercial
The Dunkirk Spirit by
Rob Lankey, managing director, Commercial Mortgages, Aldermore
Between may 26th and June 4th 1940 around 700 private boats set sail from ramsgate and prevented disaster by taking troops off the beaches of dunkirk in waters that were too shallow for British destroyers to approach. We may not be at war, but
the nation is once again ask- ing for help in its moment of need from the small guys - this time it’s small and me- dium sized businesses. the government recognises that if it is to prevent the economy from sliding back into reces- sion it will be our army of small firms that have to come to the rescue and generate the growth and employment opportunities that the public sector is unable to fulfil. it’s no surprise, therefore,
that in his autumn 2011 Statement, the chancellor outlined a raft of finance ini- tiatives designed to support Smes. But will it help? the centre piece of the
aid package for Smes is the national Loan guarantee Scheme which will make £20bn of government guar- anteed loans available under the credit easing programme. george osborne said the scheme should reduce the cost of loans to Smes by 1%. However for many small businesses a 1% reduction is no big deal - the concern many business owners have is that some banks aren’t
willing to lend to them at any cost. i’m not saying that the
nLgS scheme is a waste of time; anything that helps Smes has to be welcomed. But i do wonder if the gov- ernment is focussing its lim- ited resources in the most ef- fective way? it is interesting, for example, that figures have just been released showing that lending to Smes under the government’s existing enterprise Finance guaran- tee scheme has collapsed by 63% compared to two years ago. despite this downturn, the scheme is to be extended to include companies with sales of up to £44m and more lenders are also going to be accredited under the scheme.
Potential i think the eFg scheme has great potential, but i do wonder to what extend the mandarins in Whitehall have actually studied the current scheme in detail to really un- derstand why it hasn’t been as successful as it was hoped it would be. Will the chang- es breathe new life into the scheme, or will we be hearing similar stories of woe in an- other couple of years? You have to wonder if the
government’s expectation that Smes will come to the nation’s economic rescue, is the equivalent of hop- ing that an armada of small boats would be able to pluck retreating troops at dunkirk from the brink of disaster. Let’s hope that small busi- nesses can emulate that his- toric achievement.
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ACM10-0112-200013 mortgage introducer JANUARY 2012 45
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