It’s what I think we’ve needed for some time – a government-supported ‘business bank’ that should put enterprise at the heart of national policy and kickstart business confidence.
Today the business secretary, Vince Cable, is to announce plans for a government-backed institution as part of an ambitious industrial strategy aimed at driving the economy.
Small firms struggling to raise cash themselves will be able to apply to the new bank for help to expand.
We know start-ups and small biz are crucial to the economy – they’re what makes it tick.
But for too long they’ve struggled to secure loans and finance from the big banks.
That’s why I think Mr Cable’s announcement, due to be delivered to business leaders at Imperial College in London today, is a bold move that’s to be welcomed.
It is thought the institution could operate through alternative providers such as emerging ‘challenger banks’, including Sweden’s Handelsbanken, which has over 100 UK branches.
The government said bringing alternative providers into the business bank would help boost their lending capacity and harness existing provision such as co-investment and guarantees to support business expansion.
For me, this move is the sign of a shift to a more enterprise-focused economy, away from the service economy that has defined us in recent years.
More than that, it’s also a sign the government is listening to business. For some time the creation of a state-backed business bank has been the cry of business networks, groups and lobbying organisations.
What’s more, the business bank will act as a first port of call for businesses seeking finance.
Currently there are a myriad of finance schemes in operation, which can prove confusing for companies looking to expand and grow.
The development of a dedicated business bank centralises enterprise at the heart of the government’s agenda, and sends out a promising message to emerging businesses.