A selection of Yorkshire's leading entrepreneurs have launched a stinging attack on banks, saying a lack of access to finance is one of the biggest issues facing growing businesses today. At a round table debate hosted by Insider and Park Place Corporate Finance in Leeds, the business leaders said claims the banks were open for business were "simply not true".
The Entrepreneur of the Month round table debate brought together Insider's featured business leaders from the last 12 months alongside expert advisers to tackle the issues facing companies and pinpoint the opportunities.
However, recruit4health managing director Ella Snowball said access to cash was still the biggest obstacle to ambitious entrepreneurs.
She said: "The banks have apparently got £1bn for small businesses, but they just aren't willing to give you any money. They'll say you have a brilliant company, but no one is willing to lend. I don't know of any company that has been successful when they've asked for cash."
Chief Executive of Rixonway Kitchens, Paul Rose, agreed: "The banks are not open for business. They say they will only lend to the right companies, but who are they?"
Partner at Park Place Corporate Finance, Tim Simpson, agreed that most companies were struggling to access finance and blamed the lack of personal responsibility in banking institutions for the current deadlock.
He added: "Entrepreneurial businesses by definition are unique and innovative and the big problem is that, because banks have taken personal judgement out of the equation, they won’t fit the template for lending.
"Just a few years ago banks would sit across the table from a business and look them in the eyes to decide if they could deliver. The personal approach gets issues resolved quickly and this new template approach is an obstacle few can overcome, which is why we’re seeing a rise in the popularity of asset-based lending."
Iceotope chief technology officer Peter Hopton said the appeals process with banks often meant businesses could get access to personal judgment, but argued funding was still available to businesses with signed orders.
He concluded: "I don't go down to the bank until I’ve got the order form, but I also send it to my suppliers. It means you can usually get the necessary cashflow from somewhere, even if it's credit from a supplier."
13 January 2012
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