Business leaders pressed for more Government action to help firms access credit despite the announcement of a new £95m fund to help boost investment.
The Prime Minister challenged smaller firms to get out of their “comfort zone” and export goods abroad as he unveiled the “ground-breaking” deal aimed at helping those unable to obtain the funding they need in commercial loans from the banks.
He told a business conference in London yesterday that the award of the grants, made from the Regional Growth Fund, will be administered by the Royal Bank of Scotland and HSBC in a deal brokered by former deputy prime minister Lord Heseltine.
Ministers estimate the scheme will unlock about £500m of new investment in the SME (small and medium sized enterprises) sector, creating at least 4,000 jobs. Mr Cameron hailed the development as a “huge step forward” in the drive to create jobs.
Business groups welcomed the move, but one industry leader said the Government needed to go “significantly further”.
John Walker, chairman of the Federation of Small Businesses, said: “It is good news that some of the money from the Regional Growth Fund is now available to small firms, but we are disappointed that it looks like it will not be available to all businesses that need finance to grow.
“It is clear that grants will only be available to businesses that qualify for bank finance, but we still need greater clarity around the terms and conditions attached to the funding, the forms of business activity that are eligible for the grant and accompanying loan, and a clear indication of where in the UK this scheme will be available.”
Terry Scuoler, chief executive of the Engineering Employers Federation, said: “It’s good to hear the Prime Minister acknowledging that companies need more support in accessing finance to grow their businesses.
“Today’s measures are a welcome step in the right direction, but the Government will need to go significantly further to ensure that firms, particularly small and medium-sized ones, have access to credit at the right cost and on the right terms.”
Mr Cameron praised firms exporting goods, pointing out there were UK companies selling naan bread to India, tea to China and canoes to Eskimos.
“We need more of you to get out of the comfort zone and sell to the world,” he told the audience of business leaders.
He said often it was a small investment that helped UK businesses create the jobs, start the innovation and export goods.
The Prime Minister said the UK was behind other countries, including Rwanda, for the speed at which firms can start trading, announcing that from next April it would be easier to start up in business because there will be no more filling in “endless forms”.
Labour leader and Doncaster North MP Ed Miliband said: “I don’t think the scale of the investment the Prime Minister is talking about is really much of a solution.”