Small firms see the red tape on their loans hacked back
Small businesses today welcomed moves in the autumn statement that will axe much of the red tape around obtaining government-backed financing.
Under the plans, banks will receive the loan guarantee from the government, the benefit of which they will pass on to customers in the form of cheaper loans.
Previous government-backed loans schemes have involved far more hurdles and red tape which made them unattractive to banks and businesses.
Crucially, all loans had to be approved first by the bank, and then by civil servants. Under the new system, the bank will be able to make the decision alone, cutting out a layer of bureaucracy.
Richard Hutton, director of Harwood Hutton, a specialist in advising SMEs, said: "This is good news, will speed things up and looks a practical proposition. Business owners will be saved a lot of time and uncertainty."
He added that banks would be better at assessing risk flexibly than civil servants, whose judgments tend to be dominated by overly rigid "box-ticking" criteria.
