SME express support for new “British Business Bank”

A new report from The Open University suggests that there is considerable support amongst SMEs for the UK Government’s proposed British Business Bank. When asked, “Would an institution like the proposed ‘British Business Bank’ be likely to help firms in your industry to increase the amount they invest in their business?”, almost half of respondents (48%) agreed, while 30% disagreed and 22% were unsure. Levels of support for this new institution were also found to be broadly similar across firms of different sizes. The study, which was sponsored by the Finance and Leasing Association, also asked SME owners and managers what they saw as the bank’s key priorities. The most commonly identified task was ensuring adequate access to finance during economic downturns (64% of respondents), closely followed by improving access to longer-term finance, such as ten year loans (60%), and providing Government support so that commercial providers can lend more easily or more cheaply (59%).

Dr Richard Blundel of The Open University Business School commented: 'These early findings indicate suggest that many SMEs are positive about Vince Cable's plan to create a new institution to complement existing finance providers and deliver added impetus in specific areas, such as new business start-ups and long-term financing. Current market conditions are extremely tough for many SMEs, while the prospect of sustained economic recovery remains elusive. We may also be seeing some of these wider concerns reflected in the way that people have responded to this novel idea.'

The report is available to download at: www.open.ac.uk/quarterly-survey.