Red tape and credit desert choke exports
20 June 2012
Despite shrill calls for an export drive three-quarters of firms don’t have an overseas sales strategy in place, says the British Chambers of Commerce. Regulations and the cash drought are hampering efforts by businesses to sell abroad. Only 42 per cent of SMEs and just 15 per cent of micro-businesses have export sales plans.
In a recent survey it found that nearly two-thirds of potential exporters say poor access to finance as a reason not to trade overseas. A quarter of companies feel that red tape – especially that associated with export licences - is another barrier to selling products and services internationally. More than a third of firms say that overseas regulations prevent them from exporting.
The BCC is calling for the formation of a Business Bank as well as improving the service from existing banks. It urges High Street banks to train front line staff to explain the state-backed financial products available.
It also wants the government to incentivise training and mentoring and directly supporter smaller businesses in pursuing export opportunities.
Stephen Wright, the managing director compressed air manufacturers Thorite Group UK, agrees that unnecessary regulation and the impression it creates both remain hindrances. “It’s a big problem because it’s so difficult to see what’s real and what’s imaginary so it makes things very difficult. If the government could simplify things it would be less of a problem.
And he agrees that accessing finance remains a major headache. “A lot of business are circumventing it by relying on their own cash balances and don’t borrow because they’re turned down.
“Bigger companies don’t have a problem accessing finance – it’s to do with the small end of SMEs. So it will hit the people starting out who are going down the export route. I think the idea of a Business Bank is a good one but only if it’s open for business.”
