Local enterprise zones provide broker community with increased demand and new opportunities
The 21 local enterprise zones announced by the Government in March’s Budget are a powerful expression of a pro-growth agenda; a scheme designed to encourage areas with real potential to create new business and stimulate jobs.
In July, the Government will make its final decision on which Local Enterprise Partnerships will be awarded the remaining 10 zones. The zones will provide start-up businesses with a combination of lower taxes and reduced regulations, with the hope conditions will support firms in establishing themselves in the early years of trading.
As the new zones begin to take place there is likely to be an influx of start-ups into the UK business community, increasing the demand for finance as firms look for funding support to grow and develop their businesses. The environment created within these zones will offer businesses the best possible chance to succeed, but a dependency on the finance industry to offer them stability and to aid potential growth will be required.
Andrew Bullard, Head of Business at leading invoice finance broker Cashflow UK, says: “For a new business, securing finance can often be troublesome as the banks are reluctant to lend to start-ups as they don’t have the capital or assets in place to secure lending confidence. As a result, there will be an increasing number of business managers and owners who will be looking to secure finance from other sources, and viable alternatives to bank loans and overdrafts such as invoice finance should be the first point of call.
“With Invoice Finance, businesses can be assured of improved cashflow – no waiting for customers’ payments for example.
“As chancellor George Osborne highlighted in his Budget address, the lack of start-up capital has always been a problem in this country. The chancellor’s goal is to make the UK the best place in Europe to start, finance and grow a company, and the asset based finance industry will play a pivotal role in this process.
“The job now for brokers is educating the new breed of small and medium-sized business to ensure they have a sound knowledge of the variety of offerings available to them. For many, invoice finance may be an unknown funding solution, so it is crucial that the asset based finance industry and its members continue to educate and promote the benefits of invoice finance, in order to take advantage of new opportunities.
“There is also a need to consider whether the offerings brokers provide reflect the needs of the business community in their area. The next generation of start-ups could provide the asset based finance industry with a challenge, as they require tailored services that reflect the ever-changing nature of modern day business.
“In order to overcome this hurdle, brokers should consider providing clients with more choice and flexibility in their funding options which in the long run may help to increase their client base. Intermediary partnerships can also help brokers retain clients and win new business, by being able to provide all of the solutions their clients require.
“Asset based finance is now the funding option of choice among many UK businesses, and the broker community can take advantage of this growing demand by offering the insight and knowledge to the increasing number of SMEs the local enterprise zones will help to support.”
