Managing Director of Purbeck Personal Guarantee Insurance, Todd Davison, Emphasises the Importance of SME Funding Inquiry.
“At Purbeck Personal Guarantee Insurance, we wholeheartedly welcome the review and inquiry into the financing of SMEs,” says Todd Davison, MD of the company. “As a champion of small businesses, we want to see barriers to finance broken down.”
Davison highlights the significance of SME finance as a vital lifeline for businesses grappling with macroeconomic challenges such as inflation, the cost of living crisis, and rising interest rates. He stresses that access to responsible finance is critical to provide SMEs with the breathing space necessary to navigate this demanding period.
“Our response to the Inquiry will include the following recommendations and observations,” Davison adds:
“Our response to the Inquiry will include the following recommendations and observations:
Financial Support for ESG Initiatives
There is currently a big focus on SMEs acting in accordance with strong ESG principles. We all understand the reasons why but the costs can weigh heavy on already cash-strapped operations. Access to finance and flexible finance solutions should be considered for these initiatives. This would ultimately benefit the market and the economy as a whole.
Improved Awareness and Education
The myriad of SME finance options available for SMEs can be daunting when determining the best loan/finance facilities to suit their needs. There needs to be better education and awareness of the options available, calling on the expertise of commercial finance intermediaries/brokers such as the NACFB to help SMEs navigate for the best options available.
Faster Decisions by Big Banks
Access to finance from the larger banks for SMEs can be difficult and precious time can be wasted in pursuit of the facilities. We would like to see decisions by the big banks expedited for SMEs so that they have the opportunity to explore other avenues if necessary.
Stress Testing Part of the Loan Process
The process of applying for funding should encourage SMEs to stress test their finances in the event of interest rates rises for example.
Forbearance Measures Made Clearer
With SMEs, cash flow can sometimes fluctuate. Prior to taking finance, SMEs need to check what forbearance/assistance a lender would be able to provide in order to help manage cashflow and repayment obligations. Policies on interest only repayments, repayment holidays and a clear understanding fees/charges in these circumstances should be provided up front in the application process.