P2P industry must look outside of London
PEER-TO-PEER lenders must extend their reach to businesses beyond London as the UK’s regions continue to be underserved by finance, according to the UK’s first small business commissioner.
In an interview with Peer2Peer Finance News, Paul Uppal (pictured) said the disparity in access to finance applied across mainstream and alternative sectors.
“There’s a geographical bias at the moment. If you’re based in the South East and London, the access to finance you have, the whole plethora of choices that you have, seems to be disproportionately greater,” said Uppal.
“The number of options available in the South East is significantly higher than in the Midlands, Scotland or Northern Ireland.
“It is the choice of options, the different mechanisms for growth. Being in the South East or close to London give you the access to those options.
“P2P lenders need to spread it out a bit geographically and make sure everybody’s aware of your offering.
“If you’re on the Tube in London it is easy to see what’s out there. If we as a body can help facilitate that, then we will.”
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Uppal, a former Conservative MP and entrepreneur, became the UK’s first small business commissioner in December last year.
His office is an independent public body set up by the government, to tackle the issue of late payments to small businesses that is estimated to cost the UK economy £2.5bn a year.
The office also aims to help small businesses in other ways such as contract checking, mediation and mentoring. It is looking to increase awareness of options for those small- and medium-sized enterprises (SME) struggling to access funding at present.
“SMEs aren’t necessarily aware of all the options open to them, it would be wise to give SMEs as broad an option as possible,” said Uppal.
“Most SMEs are keeping their noses to the grindstone and not necessarily looking at all the options available for them.
“Something that can increase the perspective, or the educational aspect, of all the financial options out there would help.
“There’s a lot of choice out there, a phenomenal amount of choice and that’s choice that you can certainly make suitable for your own business.
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“If a small business has a very specific, niche requirement for lending we’re happy to point them in the right direction. We can signpost small businesses to lenders.”
The primary focus of the small business commissioner is the issue of late payment and non-payment of SMEs by larger firms.
Uppal’s office has been tasked with bringing around cultural change as they have no statutory powers and cannot fine large businesses.
“If you look at the UK generally we’ve had a longstanding problem here,” he said. “This is something that governments of both colours have tried to tackle and get prompt payment on the agenda.
“How do we get payments to small businesses more promptly and on time? We look for an exemplar of 30 days.”
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The small business commissioner aims to bring about a cultural change through interaction with businesses as well as encouraging them to chase up on unpaid invoices using the public sector body’s complaints procedure.
This allows small businesses to complain anonymously due to the commercial sensitivities around these business relationships.
“So often when small businesses are paid late it has a contagion element for other businesses in terms of who they pay and who they avoid paying,” said Uppal.
“The contagion aspect is the element we want to highlight. There’s an ethical good about paying businesses on time.
“There’s also an economic good as well because the minute that cash gets into the economy to an SME the sooner they can pay the people in their supply chain.
“The whole issue around late payments has been a big impediment on business growth. So often with SMEs predictability of cashflow is the biggest impediment to business growth.”
Uppal says that he is looking for a real, sustainable solution to this longstanding problem.
However, he acknowledges that it is difficult to keep the issue right at the forefront of government as Brexit is dominating the entire environment at the moment.
“SMEs tend to keep their noses to the grindstone, they are so busy surviving that they deal with things as they need to deal with them,” said Uppal.
“Brexit has created a lot of uncertainty, which doesn’t help, but you have to control what you can control.
“The business climate is surprisingly resilient. There’s still optimism, there’s still business going out there.
“There are still relationships being built. I’ve been quite surprised by the resilience that is out there, which is encouraging.”
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