Thoughts from the UK Finance Festival

By Shiona Davies

 

On Wednesday the 1st of May I was delighted to speak at the UK Finance Festival in Belfast. Held in the conference venue at the top of stunning Titanic museum, the morning was devoted to Invoice Finance and Asset based Lending, including a presentation from the Minister of State for Northern Ireland, John Penrose MP, who emphasised the great progress Northern Ireland had made over the last 20 years, albeit with obvious challenges now to that growth and development continuing.

John Penrose

Minister of State for Northern Ireland, John Penrose MP. © Lia Vittone / UK Finance

In the afternoon, I presented as part of the afternoon SME Banking and Commercial Finance conference. Using a very slimmed down set of charts from the latest SME Finance Monitor findings (available here), I discussed the current low levels of demand for external finance amongst SMEs and the possible reasons for this, including a preference for self-reliance even at the expense of faster growth, a lack of knowledge about the wide range of finance types available and the availability of credit balances and trade credit to help SMEs meet their finance needs.

Shiona Davies UK Finance Festival

Shiona Davies, Director, BVA BDRC. © Lia Vittone / UK Finance

One of the issues being debated by the financial sector is the extent to which this low demand is a reflection of current uncertainty (for example around Brexit) with the resulting pent-up demand being “released” once conditions improve, or whether in fact this is the “new normal” for SME use of finance.

My co-presenter Professor Richard Roberts from Aston University helped inform this debate by taking a much longer term view. He explained that the current low level of demand is not so much “Brave new world” as “Back to the future” – SME borrowing is actually quite a recent phenomenon (from the late 80s onwards) so if SMEs are deciding to manage with less / no external finance, this is in fact nothing new. He has reflected in more detail on these longer term trends and what they might mean for the future of SME finance in a report commissioned by UK Finance which can be found here.

Please do get in touch if you have any questions regarding the conference or SME Finance in general.

Catch me at my next conference on Wednesday 19 June at the NACFB Commercial Finance Expo - more information here: https://www.commercialfinanceexpo.co.uk/agenda.

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