Against a backdrop of the Virgin Money takeover of Northern Rock and the possibility of greater competition in the business banking industry, the CBI has called for a massive cash injection for the export industry as a means of improving the state of SME finances.
Discussion on how to stimulate SME sector growth and improve small business credit has encompassed a variety of subjects in recent months, including R&D tax reform, changes to bank lending regulations, invoice discounting and a new SME credit scheme, and another proposal can now be added to the list: a £20 billion government investment in export strategy.
The call for such spending comes from the CBI, which has released a report in conjunction with Ernst & Young that says the state should help ensure that 25% of SMEs are selling goods and services overseas. At present, the level stands at 20% and the 5% rise would bring the UK in line with the EU average.
The CBI argues that UK SMEs should be doing more trade with the BRIC (Brazil, Russia, India and China) nations and that as part of the investment in SME export strategy, the availability of export credit finance should be increased.
Whether or not the CBI gets its wish remains to be seen, but as the number of proposals rises and as invoice finance and factoring become increasingly popular, it is clear that improving SME lending facilities will continue to be a headline topic.
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