Access to finance has been a hot topic throughout this supplement, and indeed it has also been for the Federation of Small Businesses (FSB) of late. Since the recession and credit crunch took hold, our members have told us countless stories of going to the bank and being refused finance,
having loans and overdrafts called in and being charged extortionate interest rates.
For many firms asking for credit it was to cover cash flow needed to bridge a gap between receiving payment for work. Many that didn't get the finance they needed became a victim of the recession and sadly ceased trading. At the height of the crisis up to 120 businesses were closing their doors per day as banks were unwilling to lend and creditors were paying late - a figure which research from Experian shows we have headed back towards.
In response, the government took unprecedented measures. Not only did they bail out the banks but they also brought in a series of other emergency finance measures, some of which were open to all businesses while others were sector specific, such as the car scrappage scheme for the automotive industry.
However, despite the variations in the finance initiatives available, there have been complaints that they tend to be slow and are not business focused.
The Enterprise Finance Guarantee (EFG), on the other hand, is one of the success stories. The EFG lends to businesses that have little or no security but need finance to grow - in essence funding those organisations other lenders are unwilling to work with. While the scheme had teething problems with definitions and bank branch awareness, it soon became a good tool in the armoury of government and has made more than £1.4bn available to business across the UK.
More recently, the government announced it was to boost employment by offering all new start-up businesses a holiday on the National Insurance Contribution payments for staff that they took on. The Chancellor estimated 400,000 businesses would take advantage of the scheme, which in turn would create the jobs the economy needs.
But this hasn't happened. At a recent Prime Minister's Questions, David Cameron admitted only 7,000 businesses had taken up this opportunity.
Since the announcement of the scheme, the FSB has been calling for it to be UK-wide and open to all businesses. With confidence so low, many small firms will not take on staff if they don't need to. Therefore, we feel larger businesses looking to grow further would be better placed to utilise the scheme.
Even though the UK has technically been out of recession for over a year, businesses are still finding it difficult to access funds. Our research has shown one in five businesses have applied for finance in the 12 months to June, but 33 per cent of them were turned down. And they are being turned down even though, under Project Merlin, the banks have agreed to lend £76bn to small firms; in June this year they had only loaned a total of £37bn.
To address these issues the government is to look at credit easing - a form of small business bond market. However, the FSB does not think this is the right way to go about feeding money into businesses as it could take a considerable amount of time to set up. We would like to see a universal project that all companies, whatever their size, sector or status can access. It needs to be something that can be easily and quickly launched, possibly using existing funding schemes as its backbone and it must be at arms length from the banks.
Whatever sector a business is in, if it spots an opportunity and wants to grow quickly it will need finance. With the economy in flux, growth stalled and more than 2.5 million people unemployed, we need to see policies which will promote growth so the UK's biggest employer can get the economy back on track.
Andrew Cave is head of external affairs at the Federation of Small Businesses.
This article originally appeared in the New Statesman supplement, "The green tech revolution"