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Cridland says UK is 'missing a trick'

CBI calls on Treasury to support non-bank finance

John CridlandCompanies’ ability to access non-bank finance has not taken off despite a government review into alternative lending three years ago, says the CBI.

It has today called for a new push on this form of financing to give mid-size companies a greater opportunity to find investors willing to provide large sums without the need to seek a public listing.

The CBI says in its report Financing our Future Economy that non-bank finance has provided just £4 billion since 2013.

Two thirds of global trade finance providers (69%) said complex anti-money laundering regulation and ‘know your customer’ requirements are acting as a major barrier to firms getting trade finance.

John Cridland, director general, says: The UK is still missing a trick on long-term growth capital. The next government needs to mind this financial gap otherwise our medium-sized firms – the job creating dynamos of the economy – will suffer.

“In the same way that the profile of alternative finance has increased, we want to see politicians getting behind a UK market for privately placed debt and backing the use of equity finance, to stimulate investment and long-term business growth.

“If firms can’t get the trade finance they need to explore new markets, the UK has no way of meeting its ambitious exports target of £1 trillion by 2020.

“Of course we must have robust anti-money laundering regulations but the detailed application can be cumbersome and complex and is acting as a brake for businesses wanting to sell their products and services around the world.”

The report also highlights that the majority of the £466 billion investment needed by 2020 to keep UK infrastructure up-to-date needs to come from the private sector. But investors are being held back by uncertainty over the future pipeline of projects. It’s time for, the government to establish an independent infrastructure body to determine future investment needs and look at innovative solutions, like ‘bundling’ smaller projects together, to create an attractive proposition for institutional investors.

Commenting on this, Mr Cridland said: “Infrastructure, like transport, energy and broadband, is the hard-wiring of our economy but we’re still not investing enough to support the UK’s growth ambitions.

“We need to take the politics out of infrastructure with an independent infrastructure body. And we also need to look at innovative ways to attract investment from pension funds and insurers into our infrastructure.”

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