Mark Prisk Explores Finance Options for Smaller Firms
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Issued by the BIS on 28 September 2010
Business Minister Mark Prisk met with heads of major businesses and finance
experts today to discuss the value of supply chain finance – an important step
in the Government’s goal of widening the range of finance options to small and
medium sized businesses.
The Government is committed to increasing the range
of finance options available to businesses that are often reliant on bank
lending for credit. The green paper, Financing a Private Sector Recovery,
looked at several alternative means of obtaining finance to ensure businesses
are able to grow and boost the recovery. It aimed to start a dialogue with
businesses and the financial services industry to develop and support
alternative means of finance for small businesses.
The consultation period for the green paper closed on Monday 20 September
and the Department for Business and the HM Treasury received over 160
responses. Today’s meeting marked the first stage of working with industry on
ideas generated by the paper and the consultation process.
Supply chain finance has several forms but in most cases it involves a
buyer organising finance based on its credit rating and on invoices approved
for payment to suppliers; ensuring that businesses further down the supply
chain are able to cover their working capital while waiting for payments.
Business Minister Mark Prisk said:
“Small businesses will be critical to the economic recovery and helping
them access a range of finance options is essential for those firms looking to
expand and grow.
“We want to work with business to find the best solutions for increasing
finance to small firms, who have previously relied on banks for their finance.
I am delighted to see the responses to our finance green paper suggesting
alternatives to traditional bank lending, from which today’s discussion on
supply chain finance has emerged.
“Today’s meeting was informative and useful. Supply chain finance is
clearly an option that all large corporates should consider providing. It is
one option that could help plug the funding gap of their suppliers while
looking to cover working capital as they await payments. I look forward to
further productive discussions on other finance options.”
1. Supply chain finance (SCF) is a term used to define the financial
relationship linking the buyer and the supplier together in terms of payables
and receivables. Several options and solutions are available in the market
today, each with a variation on the offering.
2. Within a SCF solution there are typically four involved parties:
The buying organisation “the buyer”The organisation supplying goods /
services “the supplier”A technology platform “the technology or system”A
funding institution “the funding provider or investor” (can be internal,
external or institutional)
3. Government will be setting out its response to the green paper,
Financing a Private Sector Recovery, shortly.
About the Author
© Crown Copyright. Material taken from the BIS Department
for Business, Innovation and Skills. Reproduced under the terms and conditions
of the Click-Use Licence.
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Article Published/Sorted/Amended on Scopulus 2010-09-28 15:01:59 in Business Articles