We hear a lot about the banks reticence to lend to small and medium sized enterprises (SME) these days and it is often cited as a reason for this country’s continued on and off recession. Five years ago financing was too easy and that lead to the situation we are in today but the wheel has gone full circle and now finance is very difficult and this is dragging the country and more importantly our industry, back.
Eco are a profitable SME with a good financial track record and we find borrowing for projects difficult to secure we obtained it (only just) for our last AD plant but for our proposed biomass plant all the doors were firmly shut – we are having to resort to Venture Capitalist (VC) and Private Equity (PE) finance to get the project away.
Once these people have secured the returns they expect c15% there is not a lot left for Eco (but it’s better than nothing!). The Green Investment bank was meant to open the door to SME’s but it is administered by the VC’s and they (and the government) expect VC type returns so there is no cheap money there; it does however help the VC and PE money go further.
In addition WRAP financial support in the form of grants has dried up and this puts another damper on our industry
I would argue for an extension of the Small Firm’s Loan Guarantee scheme this provides for the government to guarantee loans provided by the banks to SMEs. Eco has used this scheme to great effect in our growth over the years and if it could be extended would help considerably in our future growth plan. So over to you Mr Osborne!
Trelawney Dampney, MD at Eco Sustainainable Solutions.