Sugar Takes Charge of Small Business Credit Taskforce
Lord Alan Sugar has been appointed as head of a new task force advising the government on how to ensure small businesses are treated fairly when accessing bank finance.
The government’s “Enterprise Champion” and star of the BBC programme The Apprentice will be joined on the task force by outgoing Federation of Small Businesses (FSB) chairman, John Wright, and former Lloyds TSB deputy chief executive, Mike Fairey.
The panel’s main task will be to help determine the role of the Small Business Credit Adjudicator (SBCA), which was announced in the Budget.
“Lord Sugar, Mike Fairey and John Wright understand the critical importance of new finance and credit flow to the growth of small, innovative companies.”
said Business Secretary, Lord Mandelson.
“There is a perception among small business owners that banks are unfairly denying them credit. This task force will help us understand the root of these concerns.”
However, Forum of Private Business spokesman, Phil McCabe, said Lord Sugar’s appointment “raised questions”, following his controversial comments last year when he dismissed business owners who were refused loans as “moaners”.
“Bringing a high-profile name like Lord Sugar is positive, in that it brings much needed attention to the issue of credit for small businesses which have been squeezed during the recession.”
“But Sugar needs to perform his role with an open mind. We have seen many viable small firms struggle to secure lending from banks, and many are still seeing credit restrictions or steep finance costs even as we come out of the worst of the downturn.”
According to the Department for Business, Innovation and Skills (BIS), the panel is due to meet banks and small businesses over the next few months to establish the responsibilities of the SBCA, with the aim of producing a consultation document in the summer.
BIS said that the SBCA will hear cases where a business may have been unfairly denied credit, with the potential power to “name and shame” lenders who have acted unjustly.
The SBCA will also have the legal right to overturn a bank’s original decision, should it find in favour of a small firm. It will work alongside Business Link’s Financial Intermediary Service (FIS), which offers free and independent financial advice to small firms. The FIS will be able to refer certain cases to the SBCA if it believes the business has been treated unfairly.