Capitas Finance | News

SME focus for leasing - David Cameron calls for banks to increase lending to SMEs

A call by coalition leader David Cameron for banks to increase lending to SMEs has been welcomed by the Finance & Leasing Association (FLA).

Coalition leader David Cameron told delegates at the CBI conference 2010: “To build that new dynamism in our economy . . . means opening up access to finance, creating an attractive environment for venture capital funding, getting banks lending to small businesses again.”

Stephen Sklaroff, director general of the FLA, welcomed the focus on funding for SMEs. He said: “Government has recognised the importance of asset finance for small business. We are now in talks to find out what can be done to eliminate unnecessary barriers to lending. One is lack of knowledge among SMEs, not knowing there are thousands of places to get asset finance. We are discussing creating a guide to asset finance for SME.”

The FLA’s other concern is the complexity of the tax regime, and the way in which it creates a bias in favour of outright purchase. “The tax regime shouldn’t bias an investment decision in that way. And the complexity – it puts small business off,” Sklaroff said.

The organisation is urging government to take the opportunity for change presented by the proposed new accounting rules to reduce complexity and rebalance the playing field between asset finance and outright purchase.