Tuesday, 21 May 2013

CBI and Vince Cable encourage UK businesses to look to Crowd funding



By M McDowell - Crowd Funding Editor

The changing landscape of business finance and lending in the UK continues with small and medium sized businesses being encouraged to look beyond the main high street banks for lending and sources of funds for growth. 

As the main high street banks retreat from lending to small and medium sized businesses the CBI have published a report encouraging a revolution in business finance.  Encouraging the growth of the corporate bonds market, invoice or other factoring and crowdfunding.

The crowdfunding can take the form of peer to peer lending by firms such as Funding Circle or direct equity investment through Crowdcube or Seedrs.  

The role of crowd funding is increasing and it’s growing reputation has now been recognised not only by the CBI but also Business Secretary Vince Cable.

"Britain's businesses cannot grow, export and innovate without proper access to bank credit. But they also need alternatives when looking for finance," said Mr Cable. "The government wants to see a shift in the market structure towards non-bank lending."

The challenge for Mr Cable to work with the UK Crowdfunding Association and the FCA to develop a regulatory framework to give new entrants to opportunity to provide confidence to both business and investors/ lenders.