Willingness to Invest is What Separates North & South

Earlier this week the Telegraph published an article looking at the widening gap between the North and the South of England as London businesses race ahead.

It reports that London's small firms are expected to grow at double the rate of Northern businesses over the next decade. One of the most staggering revelations is the disparity in investment in digital improvements.

More than a third in the North "plan to reduce or keep their online expenditure flat over the next 10 years" compared to 22 percent in the south.

The same old arguments are being put forward for the lack of investment - crippling taxes and a lack of Government support.

However, access to investment and releasing working capital has never been easier than it is today.

The secondary capital market – which incorporates services from crowd funding to invoice discounting - is available on a national basis.

Unfortunately, awareness and understanding of this market and the ease of accessibility to it are still very much limited, which means a significant amount of ongoing education is a must.

More from David Banfield

• SMEs Must Become Financially Savvy
• Half of Small Firms Aren't Borrowing From Banks
• The Root of Britain's Week Growth
• Credit Availability is King
• There's No Place for Business in Politics
• Basel Committee Proposals May Kill Small Business Lending
• Fixing the Productivity Crisis

Another possible contributor to the South’s acceleration ahead of the North is that with London being the natural financial centre of the UK, word is spreading faster and business owners are better informed about services such as peer-to-peer lending and spot factoring.

As a result they are quicker to adopt the financial services of the secondary market, which they are using to invest in their companies and drive growth.

In a bid to support Britain’s SMEs, the Government issued a directive to the country’s big banks requiring them to offer advice and suggest alternative finance providers to SMEs that were declined a loan.

If this is truly the case then we would ponder the thought that perhaps while this directive exists, it is not being put into play.

Surely if it were the case then banks, the front line capital providers, would be moving their SME clients into the secondary area where there is a good array of financial services and facilities readily available.

Many services are also available almost overnight as opposed to the lengthy approval (or rejection) times taken by most banks.

Indeed the long and arduous processes, put in place by the big lenders, SMEs must go through before such advice or referral will be given appear to be a very intentional attempt to deter small businesses from ever going down an alternative route.

With such resistance in place, it is clear that companies operating in the secondary finance market need to do more to raise awareness of their offerings to Britain’s growing SME market.

Also those small businesses, who claim they can’t access the capital they need to grow their operations, must take responsibility and educate themselves about the wide selection of financing options available to them.