Monday 20th May,  2013

After launching a new alternative finance guide, the CBI highlighted research that high-growth medium-sized businesses could be worth up to an additional £20 billion to the economy by 2020. It comes as a GE Capital report shows that SMEs plan to spend £51 billion over the next 12 months, but will need the right funding to realise their potential.

The CBI said that UK banks are the source of nearly 80% of all credit to growing businesses, however, the financial crisis has put the UK on an irreversible path to a ‘new normal’ in financing. Regulatory reform, balance sheet restructuring and a more realistic pricing of risk, mean that traditional bank debt will no longer be the right finance for all businesses, all of the time.

The CBI called on small and medium-sized (SMEs) firms to consider the broad range of finance options available to help them grow, including asset-based lending, Supply Chain Finance, equity investment and peer-to-peer lending.

Katja Hall, CBI Chief Policy Director, said: "The UK’s small and medium-sized businesses are the backbone of our economy so ensuring they can access the capital they need to grow and create jobs is critical.

"Banks will continue to be a vital source of finance but it’s not a one-size-fits-all solution, and we’re encouraging growing firms to open their eyes to the broad range of funding options on the market."

Vince Cable, Secretary of State for Business, said: "Britain’s businesses cannot grow, export and innovate without proper access to bank credit. But they also need alternatives when looking for finance, as a traditional bank loan might not always be the answer."