ALEXANDER CALLS ON LARGE BUSINESS TO SUPPORT HIGHLAND SMALL AND MEDIUM ENTERPRISES

23-Oct-2012

Highland MP, and Chief Secretary to the Treasury, Danny Alexander is calling on large business to support the Supply Chain Finance (SCF) scheme which will help small and medium enterprises (SMEs) across the Highlands secure increased levels of affordable finance and support job growth.

Supply Chain Finance is an innovative way for large companies to help their supply chain access credit and improve cash-flow and at a much lower cost. It has already been successfully implemented by companies including Rolls Royce and Vodafone.

Inverness, Nairn, Badenoch & Strathspey MP Danny Alexander says:

"This is a major step towards protecting thousands of jobs and boosting growth across the Highlands by helping SMEs gain access to lower interest finance if larger companies they supply inform the banks that payment of an invoice to the smaller firm has been approved.

"It clearly demonstrates that Liberal Democrats in the coalition are determined to back all those businesses who are aspiring to get ahead and take on more people. That is why we have introduced programmes like this one as well as the Funding for Lending and Enterprise Finance Guarantee, helping make more money available to viable local businesses."

John Walker, National Chairman, Federation of Small Businesses said:

"The new Supply Chain Finance scheme could help smaller firms in two key areas – improving their working capital and tackling the issue of late payments. Nearly three quarters of small businesses report that they have been paid late in the past year, placing a huge strain on cash-flow and meaning they struggle to realise ambitions to grow.

"The FSB welcomes the Government's commitment to helping small firms secure finance. We encourage large companies to support and implement the scheme, so that it can play its part in improving confidence and encouraging growth throughout the supply chain."

ENDS

Notes to editors:

·With Supply Chain Finance a bank is notified by a large company that an invoice has been approved for payment; the bank is then able to offer a 100 per cent immediate advance to the supplier at lower interest rates, knowing the invoice will be paid.

·Taken together, this means that leading companies could deliver up to as much as £20 billion of new cheaper, finance to their suppliers, including many UK SMEs.

·The Prime Minister also announced that the Government will look to, where it can, offer this to its own suppliers, starting with the first UK Government Supply Chain Finance scheme for community pharmacies in England, unlocking up to £800m of new credit for around 4,500 pharmacy businesses, many of which are SMEs.

·The Government believes that this is a major step that could be taken to boost growth, particularly for SMEs.

The Government is keen to ensure that SMEs have the widest range of credit options available to them and is taking action on a number of fronts to deliver this. This includes:

·The Funding for Lending scheme to encourage banks to boost lending in the UK economy

·The Enterprise Finance Guarantee – A loan guarantee programme which has helped more than 18,000 small firms obtain bank finance

·More than £160m invested in high-growth UK firm through support for the UK Venture Capital industry

·Generous tax schemes for people investing in start-ups and growing companies in UK

·A new £82.5m Start-Up loan programme to help young people start their own businesses