Business is broken - and better communication is the way to fix it

New research reveals that over half of new businesses used personal credit cards to get off the ground - as lending to new SMEs tumbles by £400 million in a single month.

Last month, Business Secretary Vince Cable declared that the Government’s Funding for Lending Scheme was not working. He warned that the Treasury had to make considerable changes to the scheme to boost lending unless financing to credit-starved small and medium-sized enterprises (SMEs) in Britain shows imminent improvement. His call to action was underpinned by figures, out in the same week, which revealed that mortgage levels had soared to a five year high as consumer confidence returned. However, net lending to SMEs tumbled by £400 million in September.

A day later, Experian released its own research, a survey of 600 SMEs which discovered that almost one third of those that used personal finance had used a mortgage to fund their business, putting their home at risk. Almost half had used personal credit cards to fund their businesses. Resourceful? Maybe. Does it leave them vulnerable? Definitely!

All this news has broken in the last fourteen days, but I wouldn’t say it was a fortnight out of the ordinary for these kinds of headlines. I’m continually seeing reports and articles which highlight the struggles SMEs are facing as they look to recover from a crippling recession.

However, while these stories all highlight serious challenges for the SME sector, it’s not the main problem it faces today. The inability to connect with other organisations, especially enterprises, is proving to be the biggest impediment. Collaborating with other businesses and their respective processes, whether it be procurement, payment or lending, has become a mammoth task. It’s putting a major strain on SMEs’ time, resources and funds and, put simply, it's breaking business.

The lack of connectivity is genuinely hurting SMEs’ ability to access cash – they aren’t getting paid, and with no cash, they cannot evolve their respective propositions. The fact we are seeing, for example, this criticism of the Funding For Lending Scheme, demonstrates that this connectivity needs to be addressed. When you add further challenges into the mix, you can see that SMEs need all the help they can get. Look at Wonga’s unfair rates, which clearly don’t have the interests of SMEs at heart, or the claims that the Royal Bank of Scotland deliberately pushed SMEs to the wall, so they could get their assets on the cheap.

So how have SMEs found themselves with these numerous obstacles and what can they do to overcome them and flourish? All aspiring SMEs aim to form business partnerships with larger organisations in order to accelerate their evolution. Yet they have failed before they start, as all too often they are strangled by large inoperable procurement and finance systems.

For too long, enterprises have demanded all their suppliers adhere to these clunky, inflexible systems, leaving SMEs with two options – spend valuable time and money adopting the systems that the bigger players insist on, or pass up the opportunity and never realise the goal of working with large organisations. Naturally, the SME often ends up bending over backwards and opting for the first. However, once they are finally on their new partner’s system of choice, they are locked in. There is no reason for vendors to improve the software, so SMEs continue to struggle with archaic, expensive processes. They essentially become prisoners, not suppliers. I know a small business that was being forced to pay $9,000 to send an invoice, or, to put it another way, being forced to pay $9,000 to send a 10 kilobyte email. In today’s social, open world, this is a ludicrous situation.

It’s still happening today, but it’s not just SMEs feeling the pain. Today there are so many incredible, innovative start-up businesses that can bring considerable value to an enterprise. However, these larger organisations are missing out on working with these dynamos, which could see their businesses suffer and their competitors prosper. And all because they insist on carrying out business processes “their way”.

What’s needed, both for SMEs and enterprises, is an agnostic approach, to communicate better with each other. Connecting on one platform, which removes barriers to business and facilitates better communication, will allow SMEs to build partnerships with their bigger counterparts. It will enable them to do so much more than just get paid quicker. They will be able to create apps to improve processes, transact faster and more efficiently and discover new partners and customers along the way. This will ultimately boost collaboration, increase revenues and improve business bottom line.

Business secretary Vince Cable. Photograph: Getty Images.
Christian Lanng is CEO of Tradeshift
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Westminster terror: Parliament hit by deadly attack

The Met Police is treating the events in Westminster as a "terrorist incident". 

A terrorist attack outside Parliament in Westminster has left four dead, plus the attacker, and injured at least 40 others. 

Police shot dead a man who attacked officers in front of the parliament building in London, after a grey 4x4 mowed down more than a dozen people on Westminster Bridge.

At least two people died on the bridge, and a number of others were seriously hurt, according to the BBC. The victims are understood to include a group of French teenagers. 

Journalists at the scene saw a police officer being stabbed outside Parliament, who was later confirmed to have died. His name was confirmed late on Wednesday night as Keith Palmer, 48.

The assailant was shot by other officers, and is also dead. The Met Police confirmed they are treating the events as a "terrorist incident". There was one assailant, whose identity is known to the police but has not yet been released. 

Theresa May gave a statement outside Number 10 after chairing a COBRA committee. "The terrorists chose to strike at the heart of our Capital City, where people of all nationalities, religions and cultures come together to celebrate the values of liberty, democracy and freedom of speech," she said.

London Mayor Sadiq Khan has tweeted his thanks for the "tremendous bravery" of the emergency services. 

Labour leader Jeremy Corbyn also released a short statement. He said: "Reports suggest the ongoing incident in Westminster this afternoon is extremely serious. Our thoughts are with the victims of this horrific attack, their families and friends. The police and security staff have taken swift action to ensure the safety of the public, MPs and staff, and we are grateful to them."

After the incident this afternoon, journalists shared footage of injured people in the street, and pictures of a car which crashed into the railings outside Big Ben. After the shots rang out, Parliament was placed under lockdown, with the main rooms including the Commons Chamber and the tearoom sealed off. The streets around Parliament were also cordoned off and Westminster Tube station was closed. 

Those caught up in the incident include visitors to Parliament, such as schoolchildren, who spent the afternoon trapped alongside politicians and political journalists. Hours after the incident, the security services began evacuating MPs and others trapped inside Parliament in small groups. 

The MP Richard Benyon tweeted: "We are locked in Chamber of House of Commons." Shadow education secretary Angela Rayner tweeted: "I'm inside Parliament and me and my staff are safe."

The MP Jo Stevens was one of the first to confirm reports that a police officer had been attacked. She tweeted: "We've just been told a police officer here has been stabbed & the assailant shot."

George Eaton, the New Statesman politics editor, was in the building. He has written about his experience here:

From the window of the parliamentary Press Gallery, I have just seen police shoot a man who charged at officers while carrying what appeared to be a knife. A large crowd was seen fleeing the man before he entered the parliamentary estate. After several officers evaded him he was swiftly shot by armed police. Ministers have been evacuated and journalists ordered to remain at their desks.   

According to The Telegraph, foreign minister Tobias Ellwood, a former soldier, tried to resucitate the police officer who later died. Meanwhile another MP, Mary Creagh, who was going into Westminster to vote, managed to persuade the Westminster tube staff to shut down the station and prevent tourists from wandering on to the scene of the attack. 

A helicopter, ambulances and paramedics soon crowded the scene. There were reports of many badly injured victims. However, one woman was pulled from the River Thames alive.

MPs trapped inside the building shared messages of sympathy for the victims on Westminster Bridge, and in defence of democracy. The Labour MP Jon Trickett has tweeted that "democracy will not be intimidated". MPs in the Chamber stood up to witness the removal of the mace, the symbol of Parliamentary democracy, which symbolises that Parliament is adjourned. 

Brendan Cox, the widower of the late, murdered MP Jo Cox, has tweeted: "Whoever has attacked our parliament for whatever motive will not succeed in dividing us. All of my thoughts with those injured."

Hillary Benn, the Labour MP, has released a video from inside Parliament conveying a message from MPs to the families of the victims.

Former Prime Minister David Cameron has also expressed his sympathy. 

While many MPs praised the security services, they also seemed stunned by the surreal scenes inside Parliament, where counter-terrorism police led evacuations. 

Those trapped inside Parliament included 40 children visiting on a school trip, and a group of boxers, according to the Press Association's Laura Harding. The teachers tried to distract the children by leading them in song and giving them lessons about Parliament. 

In Scotland, the debate over whether to have a second independence referendum initially continued, despite the news, amid bolstered security. After pressure from Labour leader Kezia Dugdale, the session was later suspended. First Minister Nicola Sturgeon tweeted that her "thoughts are with everyone in and around Westminster". The Welsh Assembly also suspended proceedings. 

A spokesman for New Scotland Yard, the police headquarters, said: "There is an ongoing investigation led by the counter-terrorism command and we would ask anybody who has images or film of the incident to pass it onto police. We know there are a number of casualties, including police officers, but at this stage we cannot confirm numbers or the nature of these injuries."

Three students from a high school from Concarneau, Britanny, were among the people hurt on the bridge, according to French local newspaper Le Telegramme (translated by my colleague Pauline). They were walking when the car hit them, and are understood to be in a critical condition. 

The French Prime Minister Bernard Cazeneuve has also tweeted his solidarity with the UK and the victims, saying: "Solidarity with our British friends, terribly hit, our full support to the French high schoolers who are hurt, to their families and schoolmates."

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.