The flow of credit, that small and medium sized enterprises are forced to treat as their life blood, has long since been an unpredictable and hard to obtain trickle. Subject to random alterations, withdrawals and interest rates that kill cash flow in businesses made vulnerable by economic conditions. Suffocating start-ups and snuffing out green shoots as quick as they can sprout.
Large companies are routinely making late payment to the detriment of smaller suppliers, in my opinion to protect their own liquidity. Contractors without their resources are at risk of going under, with every invoice. I cannot rely on an income stream where I chase invoices. They don’t get paid on time.
In China, the pawn brokers market is expanding to fill a hole left in because Chinese state owned banks won’t lend to businesses on the private market. Across the Eurozone, small businesses, again, with an uphill struggle to get finance. In Egypt, the entire economy existed outside the ‘markets’ who apparently just fed from them while demanding their revolution didn’t disrupt anything.
In the UK the government was willing to underwrite risk’s involved in lending to the SME sector. The Enterprise Finance Guarantee Scheme is a standing joke, and Merlin a better name for a wizard than the vague waffle we occasionally heard when pushed at a Downing Street press conference. Bank delays and hurdles, the opener to tales of woe that echo with businesses across the UK.
After the election, our local authority immediately had to knock small business grants of £500 on the head, even though the area was to be disproportionately hit by the rounds of cuts which went unnoticed before and after the election. Business Link knew its days were numbered in the weeks after the election, and Regional Development Agencies offering finance and grants of £5000 to local start-ups were immediately shut. They were replaced with a Regional Growth Fund, initial minimum investment of £1million, while small businesses now encouraged to approach ‘social enterprises’ who ‘can’ lend money at bad credit card rates, Who will pay one of their consultants a great deal of money to check for you, or to help you form groups capable of accessing Regional Growth Funds designed to enable larger entities to hoover up your remains.
Business Angel networks little than a way for rich people to ask for enormous shares of your business while you flatter them; because it’s preferable to credit and there is none. A misogynist monster designed to snuff out businesses and suck them dry, as soon as they threaten to exist.
Even though low and fixed income spending is most likely to go directly into the heart of the local economy and SME, and had long been subsidising this part of our housing and mortgage market, welfare was the first target for austerity. This is a crucial economic tool, and both left and right were busy arguing over the extent to which it should be used to starve single mothers into chastity, and kick the cane away from the sick. So it could be used to postpone the day we have to address why the part of the the economy thsi was done for the benefit of, is so broken. Actual discussion about the state of things is not currently acceptable to politically affiliated press. All our political parties decided these people were going to become a part of the informal economy, with no need for their representation.
I had a figure, which showed how much money had been sucked out of the Stockport economy, directly through welfare cuts, and I can’t find it, single mothers being starved into chastity was not the only consequence. The businesses which build the futures of communities, can’t function if the community can’t pay for them. Major supermarkets are losing their mojo now families have to notice the hidden extras and have realised they can go to Lidl, or shop local. While they still have the opportunity before the local shops are driven out of business for the supermarkets bringing ‘growth’.
Even in the face of that, businesses of all sorts of shapes, sizes and colours are springing up. Extreme patience and planning required if the government is continually undermining your ability to live never mind build a business.
With visible reminders of 30 years of this bollocks etched on towns across the north, we know that there is no source of growth coming. So we have to be it. You think the assumption that the private sector would pick up public sector slack, would have worked out better, if small business grants had gone out instead of a government message that only those with non-jobs who deserved it were being targeted?