By Claire West
The Bank of England’s (BoE’s) proposed £90bn lending boost is good news for business and alternative lenders, whether the banks take up BOE Governor Mark Carney’s proposal or not. However, according to pensionledfunding.com, this is still less than the £100bn currently available to the UK’s SMEs through owner/director’s own pension funds.
Adam Tavener, Chairman of Clifton Asset Management which runs the pensionledfunding.com resource, welcomed the announcement at a time when more banks are working with alternative lenders to provide collaborative solutions to their customers.
Mr Tavener said: “Mr Carney’s intentions stimulate debate around business funding requirements and highlight the lending alternatives available to SMEs. As lending has continued to fall by around £10bn a year since the financial crisis, it is important that the BoE looks at new initiatives to provide financial support to UK SMEs. However, there is clearly some uncertainty on how many banks will accept Mr Carney’s proposal and, whichever way the decisions go, this is good news for alternative lenders.
“While a collaborative approach to lending is certainly the best way to support thriving businesses, we remain keenly aware of the £100bn of owner/director pension assets immediately available to SMEs which could provide a direct boost to the economy.”
“The tightening or relaxation of banking regulations have not always been successful in their primary aim of increasing bank lending, but they have created significant debate about who small businesses should turn to when sourcing working capital. Without question, the answer has increasingly become the alternative lending sector, whether by business owners backing themselves through pension-led funding, or seeking the help of others via peer-to-peer lending or crowdsourcing.”