Businesswoman Debbie Tams - Beauty and the Bistro, Staffordshire

Debbie Tams: The next Government needs to support SME funding 

3 mins read

With just days to go until the General Election, Debbie Tams, owner of Beauty and the Bistro, a multi-million-pound restaurant, beauty salon and mini spa due to open in Basford later this year, discusses why she thinks it is crucial that the next Government backs SMEs by helping to break funding barriers. 

As the election looms, we need to make that all-important decision on who to vote for. The parties have certainly made promises but whichever party wins, it is critical that they put strategies in place to support SME funding and help increase the number of new start-ups.  

SMEs (small to medium-sized enterprises) make up 99.9 per cent of the nation’s business population and are the backbone of the economy. As such, it is imperative that risk-taking and entrepreneurship are rewarded and encouraged. Thriving SMEs generate tax revenues for public services, create jobs and help the economy to grow. Nevertheless, growth and profits appear to have become dirty words and much of our focus and time has been on more fashionable, ideological issues which do very little for the economy in these difficult times. 

As an economist and previous university lecturer in business, my understanding of entrepreneurship was that one of the four cornerstones of a capitalist-based free market economy is that risk is an inherent and unavoidable factor. How then, when all prospective lenders and investors are so heavily reluctant to assume any unsecured risk, can a capitalist economy be expected to thrive? Sadly, it appears that the theory, that I so enthusiastically taught at university, is completely different to the reality. 

No good business should be thwarted due to lack of funding and billions of pounds of potential tax revenue, job creation and economic growth should not be prevented. 

A friend heads up the main Kosovo Bank and I recall a conversation we had about lending. She said they always find a reason to lend and search for any asset they can, to secure the loan against. She gave an example of a farmer and said they might secure the loan on his chickens. They knew his chickens were his main income/asset and he would do everything he could to protect them. Kosovo has experienced solid economic growth over the past decade.  

Since the economic crisis in 2008, all UK High Street banks have refused to fund any start-ups, since they require at least 18 months’ worth of trading accounts. I asked one bank why they wouldn’t lend, despite my offering a fully unencumbered property which would more than amply secure the loan, and the answer was, “Banks are not in the property business.”  

Banks are currently riding on the back of high interest rates, so they don’t need to assume any risk by lending. The new Government needs to incentivise banks to help support new start-up businesses and accelerate the number of growing companies.    

It appears that many Asian-led UK businesses are flourishing and expanding, and I believe they have got it right. Notwithstanding the propensity towards a hard-work ethos, it is the ease at which they fund their businesses.

For example, if they want to open a shop, the family/community all chip in (without charging interest) and the shop opens. The shop makes a profit and the ‘investors’ are repaid. They are now able to open a second and third shop.  

For four long years, I searched every avenue for funding for Beauty and the Bistro, to no avail. It seems that they all search hard to find a reason not to lend.  Their lending criteria is not transparent and is very much a tick box exercise. If the computer says “no”, then you’ve had it. We need our funders to think outside the standard tick box since it is stifling entrepreneurial, innovative, and growing businesses.  

Despite a robust business plan/model and clear demand for the service, I’ve had brokers all over the city searching for funding on my behalf, all of whom eventually gave up. This then forces one down the route of second or third-tier lending often with aggressive companies, not FCA registered, offering astronomical interest rates and eye-watering costs and fees.

These make a business far more likely to fail, or not start at all. The alternative is private investors or entrepreneurs who cash in on your desperation.  

As a female entrepreneur, I am also conscious that the statistics are against me. One-fifth (20.5 per cent) of all new company incorporations in 2022 were all-female led (Rose Review Progress report 2023) yet women-led businesses are being seriously overlooked when it comes to funding and female founders receive only one to two per cent of venture capital funds, inhibiting scale-up (UK VC & Female Founders, report, February 2019).  Women also start businesses with 53 per cent less capital than men.

This female inability to access funds then shuts the door on potentially billions of pounds more of economic benefit and potential growth.  

To provide a fair and level playing field, the new administration should encourage full transparency from SME lenders over lending criteria, upon which lending decisions are based.  Further, I hope they will mandate publicly available funding for women-led businesses in an attempt to redress the balance.  

Churchill once said, “Some people regard private enterprise as a predatory tiger to be shot. Others look on it as a cow they can milk. Not enough people see it as a healthy horse, pulling a sturdy wagon.” 


Hayley Johnson

Senior journalist with over 15 years’ experience writing for customers and audiences all over the world. Previous work has included everything from breaking news for national newspapers to complex business stories, in-depth human-interest features and celebrity interviews - and most things in between.

1 Comment

  1. The challenge new start ups also face is the fact that large businesses often have ridiculous payment terms such as 60 days end of month, even though they have had the service or product. Can we not find a way of changing this culture by paying smaller SME’s the invoice when it is actually due. It astounds me when the SME’s are offering the credit and the larger organisations state on their PO that these credit terms are basically irrelevant as upon accepting this order you accept our payment terms….why not just pay up front for the service or product?

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