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24 October 2012

FSB Wales and Institute of Welsh Affairs

Reference number: PR24102012

Federation of Small Businesses

Press release

24 October 2012

FSB Wales and Institute of Welsh Affairs join forces to explore alternative finance for small businesses

The Federation of Small Businesses Wales (FSB Wales) and Institute of Welsh Affairs (IWA) hosted a conference looking at alternative routes to finance for Welsh micro-businesses.

A recent survey by the FSB showed that, in quarter 3 of 2012, Wales had the highest proportion of businesses applying for credit in the UK, yet more than half (60%) found it to be unaffordable.

The small business champion has been raising awareness of the problems encountered by many businesses trying to access finance and has called on decision-makers in Wales and Westminster to champion alternative forms of finance.

At the conference, the role of asset-backed finance, peer-to-peer lending, business angels and community development finance institutions were discussed. Case studies of businesses which have faced and overcome problems in micro-finance sectors were also highlighted.

Conference speakers will include Professor Richard Werner, Director of Southampton University''s Centre for Banking, and representatives from the Wales Business Angel Network and the Funding Circle Online Marketplace.

The FSB''s research into the issue will also be presented and international examples of best practice will be discussed, including the USA and Germany, where funding models tend to be more varied, local, and long-term.

Janet Jones, Welsh Policy Unit Chair for the Federation of Small Businesses, said:

"Businesses across Wales and the UK are having a tough time trying to access the finance they need to invest, grow and take on staff. Even those which do make it past the initial application can encounter further stumbling blocks in terms of the affordability of the packages they are offered.

"This inability to obtain competitive and affordable finance has resulted in many of our members reporting using personal credit cards or remortgaging to finance their operations.

"We call on decision-makers to foster non-traditional finance channels and we hope the conference acted as the springboard from which creative and viable options will be posed for Wales.

"Our hope is that this will not only give small businesses the confidence to explore alternative routes of credit, but also give non-traditional providers the confidence to invest and promote themselves to a far larger extent with small businesses."

John Osmond, Director of the Institute of Welsh Affairs, said:

"Micro-businesses employing a handful of people account for more than 90 per cent of businesses in Wales, more than 190,000. They are the growth engine of the Welsh economy, yet they experience severe problems in obtaining finance.

"Our conference explored creative alternatives to the conventional banks: asset-backed finance, peer-to-peer lending, business angels and community development financial institutions and it was positive to open dialogue on the issue."