Rural Growth Review

Earlier this year the Government announced that the next stage of its growth review would have a rural component. I hope amongst other things it will reflect on the issue facing the rural businesses referenced in this article. It explains:

Despite banks’ pledges not to unexpectedly withdraw facilities, the agents reported that business owners believe an approach to their bank is likely to result in bad news. “Fear of repricing or withdrawal of existing facilities continued to discourage many small businesses from approaching lenders altogether,” the agents’ monthly summary of business conditions said.

Companies are scaling back investment plans, the agents found, with much of the capital spending that had been resumed after the recession completed and some new investment plans put on hold. Chuka Umunna, the shadow business secretary, said: “It is deeply worrying that small businesses are being put off from applying for finance because of fear that existing facilities will become more expensive or be withdrawn. “Businesses who are trying to grow are hindered at every turn. The Government needs to adopt a credible plan for growth, enabling business to unlock capital and invest.”

What also needs to be said but it absent from this article and these comments is that the unique challenges tied up with distance from markets facing rural businesses are further exacerbating financing difficulties for small rural businesses and need to be considered as part of this agenda – particularly in the context of the rural element of the growth review.