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Contractor accountants could receive more assistance

Contractor accountants could receive more assistance

UK businesses are to receive financial assistance from a new business growth fund set up by six of the major British banks.

Companies whose average turnover is between 10 and 100 million pounds will be able to get equity support from the fund in one of a number of initiatives announced by the bank taskforce last week. Qualifying businesses could receive equity of £2m to £10 from the scheme.

Over the next few years, the taskforce, which comprises Barclays, Standard Chartered, HSBC, Santander, Lloyds and the Royal Bank of Scotland plan to build up a 1.5 billion pound investment portfolio.

However, Bibby Financial Services thinks that small businesses and freelancers have been overlooked by the proposals. Bibby’s chief executive, Edward Rimmer, points out that many small businesses will not have the high turnover figure necessary to qualify for this financial aid and the banks do not appear to have proposed any measures to help them.

He also questions whether businesses that do qualify will in reality want to hand over ownership of their company to the taskforce at a time when trust in the banks is low.

SMEs are the lifeblood of the UK economy and the government appears to be missing the point and targeting the upper end of the spectrum instead of helping the newer, smaller businesses, he added.

Another expert, Michael Baxter, the editor of the online magazine Investment and Business News, agrees that the principle behind the idea is a good but he thinks that the fund might not be big enough. He would like to see the Bank of England put some of the money it has earmarked for the quantitative easing programme into a similar scheme.

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Image: HELP by loop_oh

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