smallbusiness.co.uk: Helping your business think big

A new government review will focus on how small and medium-sized enterprises (SMEs) will recover from the economic downturn.

Led by venture capital expert Christopher Rowlands, the study will examine whether SMBs need to be supported with further government intervention, such as a modern-day version of Industrial and Commercial Finance Corporation, which was established in 1945 to offer capital to small firms.

Business secretary Lord Mandelson points out that the government has already taken steps to increase short-term access to finance for SMEs to help them survive the global recession.

He adds: 'This review will identify if there is a role for government in facilitating public and private investment to address gaps in the market. Our priority will be to ensure that high-growth businesses ... are able to secure the capital they need.'

Recent research from the Confederation of British Industry showed that companies believe the supply of credit is improving.

According to the survey, a net 20 per cent of firms believe it has worsened in the past three months, an improvement on the 36 per cent recorded in March and the 62 per cent in January.

However, figures from the Bank of England published earlier this month show that lending to businesses fell by £4.7 billion in April, which is the biggest monthly decrease since records began over ten years ago.

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