British Entrepreneur and former BBC Dragon’s Den star James Caan has called for ‘greater transparency’ from Britain’s banks in terms of their ability to lend to Small and Medium Sized Enterprises.

Despite the government’s introduction of the enterprise finance guarantee scheme designed to increase banks’ lending to small businesses, the actual sums lent are still in decline, prompting criticism from business representatives.

British Entrepreneur and former BBC Dragon’s Den star James Caan has called for ‘greater transparency’ from Britain’s banks in terms of their ability to lend to Small and Medium Sized Enterprises.

It’s not realistic for businesses to see banks as the fairy god mother,” said Mr. Caan. “Many people wrongly think banks are a one stop shop for business finance and that they will make a decision to lend purely from a business plan. But banks are not equity investors.”

“The reality is that banks now generally require security to lend to businesses in the form of a house, and even then most are only willing to lend up to 60% of the value of the house, which is not enough to finance the enterprise”.
Mr. Caan believes that banks should do more to communicate to small to medium sized business owners that they should not be reliant on them as the sole source of business lending.

“Partnerships must be forged between the banks and other sources of finance such as the Government backed Loan Guarantee Scheme, Venture Capital Funds and Institutional Funds”, said Mr. Caan.

“The best banks will communicate effectively and assist people forging alliances with other sources of income”.