A new cross-party report that has been published states that one of the biggest obstacles to the government’s ‘levelling up’ plans is a severe lack of lending options for small and medium-sized enterprises (SMEs).

This report was put together by the All-Party Parliamentary Group, and it argues that UK SMEs are currently unable to secure the financing they need to grow and help the various regions ‘level up’ due to a collapse in trust between them and major lenders, such as banks. As the report points out, credit from lenders is frequently essential to the growth of smaller companies before they become fully established.

For that reason, the report argues that these companies being denied that sort of outside financing is preventing them from growing and creating jobs for more people. In turn, this is holding back attempts to eliminate regional economic inequalities.

One possible option for smaller companies in this position is to hire accountants from Goole or whichever region they are in. These accountants can help them to develop solid business plans to make them more attractive to investors.

Speaking to City AM, Danny Kruger MP stated that:

“We need lenders whose interests align with those of the community as a whole…CDFIs are more flexible, don’t have blanket lending policies and can apply real human judgement to the decisions they make about lending.”

Among the recommendations in the report are the creation of the community development finance institutions (CDFIs) and increased government funding for regional lenders.