News Release issued by
the COI News Distribution Service on 28 September 2010
Business Minister
Mark Prisk met with heads of major businesses and finance experts
today to discuss the value of supply chain finance – an important
step in the Government’s goal of widening the range of finance
options to small and medium sized businesses.
The Government is committed to increasing the range of finance
options available to businesses that are often reliant on bank
lending for credit. The green paper, Financing a Private Sector
Recovery, looked at several alternative means of obtaining finance
to ensure businesses are able to grow and boost the recovery. It
aimed to start a dialogue with businesses and the financial
services industry to develop and support alternative means of
finance for small businesses.
The consultation period for the green paper closed on Monday 20
September and the Department for Business and the HM Treasury
received over 160 responses. Today’s meeting marked the first
stage of working with industry on ideas generated by the paper and
the consultation process.
Supply chain finance has several forms but in most cases it
involves a buyer organising finance based on its credit rating and
on invoices approved for payment to suppliers; ensuring that
businesses further down the supply chain are able to cover their
working capital while waiting for payments.
Business Minister Mark Prisk said:
“Small businesses will be critical to the economic recovery and
helping them access a range of finance options is essential for
those firms looking to expand and grow.
“We want to work with business to find the best solutions for
increasing finance to small firms, who have previously relied on
banks for their finance. I am delighted to see the responses to
our finance green paper suggesting alternatives to traditional
bank lending, from which today’s discussion on supply chain
finance has emerged.
“Today’s meeting was informative and useful. Supply chain finance
is clearly an option that all large corporates should consider
providing. It is one option that could help plug the funding gap
of their suppliers while looking to cover working capital as they
await payments. I look forward to further productive discussions
on other finance options.”
Notes to editors
1. Supply chain finance (SCF) is a term used to define the
financial relationship linking the buyer and the supplier together
in terms of payables and receivables. Several options and
solutions are available in the market today, each with a variation
on the offering.
2. Within a SCF solution there are typically four involved parties:
The buying organisation “the buyer”The organisation supplying
goods / services “the supplier”A technology platform “the
technology or system”A funding institution “the funding provider
or investor” (can be internal, external or institutional)
3. Government will be setting out its response to the green
paper, Financing a Private Sector Recovery, shortly.
4. BIS' online newsroom contains the latest press
notices, speeches, as well as video and images for download. It
also features an up to date list of BIS press office contacts. See
http://www.bis.gov.uk/newsroom
for more information.
Contacts:
BIS Press Office
NDS.BIS@coi.gsi.gov.uk
Miles Erwin
Phone: 020 7215 5981
miles.erwin@bis.gsi.gov.uk