By Ben Simmons
Technology companies' growth plans are being hampered because financial institutions do not understand their business and financial needs, the UK’s tech centre trade body, Intellect, has warned.
“Businesses in the technology sector which have weathered the effects of recession are now looking into getting back on the growth path,” said Simon Orme, chair of Intellect’s SME Advisory Council.
“However, many of them still face difficulties in accessing finance. Part of the difficulty is that the economics of high tech firms can be more difficult to evaluate than tradition ‘bricks and mortar’ businesses. Many tech firms are also highly innovative, constantly developing new products and services for new or untested markets. Too often funding organisations focus on the possible risk element of innovation, rather than the potential reward element.
“Technology SMEs [small to mid-sized enterprises] are the backbone of driving innovation and productivity and the UK’s economic recovery depends on a strong and growing technology sector. Financial institutions need to invest in understanding the unique needs of technology SMEs.”
Intellect stages monthly briefings around the UK which bring together businesses and the Bank of England. For the past six months businesses have reported that raising finance is one of the top issues they are facing.
To help tackle the problem Intellect is staging a one-day event to bring together technology SMEs and financial institutions and provide advice and guidance on how to access the right funds for growth.
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