Industry leaders have welcomed government plans to launch an inquiry into supply chain bullying and small business productivity.
The Treasury Committee launched an inquiry into the lessons to be learned from Royal Bank of Scotland’s GRG and more broadly at the state of the market for SME finance.
The Business, Energy & Industrial Strategy (BEIS) Committee also launched a separate inquiry into Government support for small businesses to increase productivity, and whether enough is being done to protect firms from unfair treatment by large companies.
Welcoming the launch of a BEIS Select Committee inquiry, Federation of Small Businesses National Chairman Mike Cherry says: “The collapse of Carillion provides a mere glimpse of the pernicious supply chain bullying culture which is sadly rife among big corporations. Taking forward FSB recommendations for ending a late payment crisis that causes 50,000 business deaths a year should be the BEIS inquiry’s top priority. What we can’t have is another Carillion scenario in future.
“Small firms account for 99 per cent of the UK business community. The solution to closing our productivity gap lies in incremental output gains among small firms and the self-employed, not headline-grabbing initiatives from big multinationals. We look forward to working with the BEIS committee on routes to upskilling small businesses and encouraging them to innovate and invest.
“From the staircase tax, to GRG, to cash machine cuts, the Treasury Committee has been vocal on the issues that matter to the small firms in recent months.
“As it launches this new inquiry, the Committee is right to flag the absence of regulatory reform around small business lending since the financial crash. That’s despite hundreds of entrepreneurs being driven to the wall by banking scandals during the downturn. The FCA’s most recent set of recommendations for increasing small business access to redress fall well short of the mark. We encourage the Treasury Committee to keep the pressure on regulators during this inquiry.
“Only one in ten small firms currently applies for external finance. The majority of small businesses rely on traditional loan or overdraft facilities from banks, even though they may well not be the right products for them. We need to get more small firms thinking about all of their options while breaking down misconceptions around equity finance. We look forward to working with the Treasury Committee to scrutinise these issues in the weeks ahead.”
As recent events have demonstrated, it is essential that SMEs put in place a business continuity plan that takes into consideration how their business will continue if one or more of their suppliers are hit by a major incident.
Our business experts at Beavis Morgan work with many entrepreneurial businesses across a range of sectors, helping them set up and run their own businesses and guiding them through each stage of the process, whilst navigating the challenges and advising them in making the right decisions both now and for the future.
Through our partner businesses, BM Structured Finance and BM Advisory, we are also able to help with sourcing and restructuring debt finance for SME businesses, as well as assisting with resolving issues which can impact on business performance and success, and finding innovative solutions for businesses and individuals in distress.
If you would like to know more about how we can assist you and your business, contact Steve Govey or your usual Beavis Morgan Partner.