role that start-ups will play in the
future growth of the UK economy it appears that more urgent attention needs to be given to supporting high-growth businesses.
Research earlier this year by National Endowment for Science, Technology and the Arts (Nesta) shows that these high-growth businesses have continued to perform strongly despite the recession and that during the period 2007-10 just 7 per cent of UK businesses generated 49 per cent of new jobs created by companies with 10 or more employees.
In the past year alone, there have been nearly 400,000 new private sector jobs created. The overwhelming majority of these coming from just 10,000 UK growth companies which now employ half of the
country’s
working population. The stats are not lost on Business Secretary Vince Cable who recent spoke of them as “these are brilliant companies, but there just aren’t enough of them. To get more of them, we have to create environment of entrepreneurship.”
Guy Rigby and Adrian Walton provided informative summaries on the importance of the budget in March, including the major changes, implications and benefits of EIS tax relief. One of the major obstacles facing growth business has been the perceived failing by the banking sector to back potential high- growth companies. The danger highlighted in recent reports is that the credit-scoring systems used by banks for
making
lending decisions is prone to rejecting the riskiness of growth- businesses who require liquidity as opposed to investment.
The result of a failure by banks to lend to potential high growth companies has serious implications for jobs and economic growth and suggests that banks may still, despite government intervention and imposed lending levels, be losing out on opportunities for profitable lending. The question was tackled by Travers Clarke- Walker Product and Marketing Director at
Barclays who
provided an honest and frank account of bank lending to small business. He was adamant that banks are lending to sme’s but the due diligence process is more strictly adhered to than in the past too ensure that the right lending and support is going to the right type of business. Reflecting back on earlier presentations by Duncan Cheatle on the ‘Right Type of Growth’ and David Scholtz on ‘Tailoring Your Business Plans for Investors’, Travers discussed the
importance within your of credibility business and
financial plans and of building a story about your business and knowing your banking relationship manager.
Consensus at the event was that whilst the political climate supporting
entrepreneurs
and small businesses was overwhelming positive more practical efforts need to be made to support growth businesses.
Understanding the needs of sme’s was identified as a critical factor for not only government but also larger corporate organizations as the winners in this
next era are those companies who are organising their business models for the transactions in their ecosystem where they have sought
their natural allies, and make it in everyone’s interest for them to win together.
53 entrepreneurcountry out
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