Growth can’t wait for 18 months

Today Vince Cable announced that the much-anticipated ‘business bank’ will be up and running within 18 months and will operate via existing lenders.

Unfortunately, many SMEs won’t be able to wait that long for finance, while the news that it will be available through existing lenders will not be a source of comfort for people either, as many have become disillusioned with trying to raise cash the traditional way.

Vince Cable is a man who knows his apples and is clearly trying to do what he can to stimulate the economy, but people are bound to be frustrated by the setup timeframes, with the public having to wait until the publication of the autumn statement in December for details of how the bank will be funded and operated.

In the meantime we suggest those SMEs look to other sources, like crowdfunding, to access cash.

Mr Cable also suggested much of the funding for the bank would come from the private sector, but if those companies want to lend to businesses now rather than in 18 months, they might consider using crowdfunding too. With returns of 8-12 per cent, it could be a very fruitful investment.

Curious current accounts

Something else that caught our eye this weekend was a Lloyds TSB advert offering current account customers four per cent interest on balances between £5,000 and £6,000, which incidentally is higher than any of its available savings accounts.

Why? We’re not quite sure. Firstly it seems like a lot of cash to have in a current account, and secondly it’s still much less than the returns that could be made through a crowdfunding investment, which would look to double that return.



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