What is the Business Finance Council? A guide for small businesses and the self-employed

The government has announced that it’ll set up the Business Finance Council to support businesses following Brexit.

The exact details of the Council haven’t been announced, but it’s intended to help businesses access finance and “make the most of the opportunities that Brexit will bring.”

What is the Business Finance Council?

The Business Secretary, Andrea Leadsom, met with top figures from Britain’s leading banks and lenders to discuss support for small businesses after Brexit.

Following that discussion the government announced that it’s creating a Business Finance Council, co-chaired by Andrea Leadsom and John Glen, the Economic Secretary to the Treasury.

It’ll be made up of “senior representatives” from the UK’s banks and alternative lenders, and its aim is to “identify and address any barriers faced by small and mid-sized businesses in securing the finance they need, particularly working capital and finance for investment.”

The government says it’s also hoping the Business Finance Council will help lenders demonstrate their support for businesses across the country.

But will the Business Finance Council help small businesses?

Back in April, we revealed that 76 per cent of small businesses don’t feel supported ahead of Brexit. What’s more, just over a third had decided to delay growth plans – so the Business Finance Council could help small businesses access the funding they need to invest in their future.

The government is optimistic that the Council will help businesses get this funding. Andrea Leadsom said it will “bring together key players, ensuring that finance continues to flow to our brilliant British businesses” following 31 October.

Mike Cherry from the Federation of Small Businesses told the Telegraph that the Business Finance Council is “undoubtedly needed”. But he stressed that small businesses would need to be involved directly, and also cautioned against repeating “small business banking horror stories” following the financial crisis.

Mr Cherry said: “If we do suffer from a downturn in the months ahead – as a number of forecasters predict – we need reassurances that the banks are not going to turn off the taps for small firms as they did during the financial crash”.

Existing schemes can help businesses access finance

To support small businesses, the Business Secretary also encouraged lenders to use existing ‘guarantee schemes’ available through the British Business Bank.

These guarantee schemes help viable businesses – who don’t meet the lender’s usual requirements – to access finance.

The schemes include the Enterprise Finance Guarantee (EFG), which helps businesses that don’t have enough security to borrow, as well as the ENABLE Guarantee. This one gives businesses greater choice when it comes to finance, as it lowers the regulatory capital needed for lending.

What barriers have you encountered when it comes to accessing finance? Let us know in the comments below.