Funding crisis crushing innovation
Article Date: Jul 09 2009
Bank loans are still scarce
Finance is still not available for promising start-ups, according to a successful British inventor and Business Link adviser.
Jeff Woolf, who advises small and growing businesses, says, ‘None of my clients at Business Link have been lent a penny. It just doesn’t seem like banks are lending.’
Adds Woolf, who was awarded an OBE for his invention of the credit card-sized map MicroMap, ‘I am not optimistic in the short-term that inventors are going to be able to fund themselves. It’s tough out there at the moment.’
Woolf’s comments are supported by figures from the Bank of England showing that the net monthly flow of lending to private businesses this year averages less than £1.5 billion, compared to monthly averages of £4 billion during 2008 and £7 billion in 2007.
But Huw Morgan, head of business banking at HSBC, believes that the fall in lending is due in part to reduced demand from businesses. ‘Businesses are hunkering down, and so aren’t looking for more credit,’ he claims.
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