The Treasury has invited smaller businesses to share their views on how best to improve the availability of finance to firms in the UK.
The discussion paper centres on ways of offering smaller businesses access to non-banking sources of lending.
Specifically, the paper looks at credit assessment and monitoring; corporate transparency; transparency in the pricing of bank loans; UK investor preferences;and non-bank loan markets and high yield bond markets.
<<p>The aim of the document is to identify barriers to the development of these alternative sources of finance and to find out the views of businesses on how the government can help them with new avenues of funding.
Paul Myners, the Financial Services Secretary to the Treasury, said: “The extraordinary events in credit markets over the past two years have shown that the continued availability of any single form of business finance cannot be taken for granted.
“Here in the UK, our large corporations have had a great deal of success in accessing finance directly from credit markets with a surge in corporate bond issuances. Smaller firms, however, have not been able to similarly replace bank lending by directly tapping financial markets or non-bank financing.
“A more diverse funding market, where large and mid-size firms can go directly to markets or have options other than banks when they are looking for support, would clearly be an advantage to the UK economy, not just in economic slowdowns.”
The paper can be found at http://www.hm-treasury.gov.uk/fin_non_banking.htm