In anticipation for Alistair Darling’s budget announcement, I sat at home startled at what Sunday’s evening TV news threw at me… “Banks to be forced to lend to businesses”.  At first I thought “good news, at last”, and I still do. However the finer details of today’s announcement might prove to disappoint, and I’ll tell you why…

Today’s budget included a doubling of the annual investment allowance, a £200m growth capital fund for SMEs, a £2.5bn one-off growth package for small businesses and the guarantee that Lloyds TSB and RBS will together lend at least £94bn to UK businesses.

Great! All of the above is needed, but unfortunately that’s been the case for far too long.

Growth to nowhere? Darling's budget lacked detail.

Back in October 2008 we rallied Government to extend loan guarantees to small businesses. The banks, either through collective ignorance or in self-preservation, started to rescind credit lines that viable companies had previously thrived on. This forced many companies capable of repaying debt to go bust – or in our case, put vital expansion plans on hold. We also urged the Government to force banks to lend to companies that want to grow, even suggesting that a change in VAT accounting could increase short term liquidity.

The Government and the banks could have helped (and saved) many more businesses in this past year to grow, expand, and keep more people in employment. They could have, that is, if guaranteed (forced) lending had been in place about year ago.

Our, very valid, argument was that exporting was the only real way to ensure we address our widening trade deficit and get the UK out of recession. When you look at  how countries like Japan, whose exports almost doubled last month alone, are coping with recession – it’s quite embarrassing on the world stage.

So where in this budget are the incentives that UK businesses and the economy need for boosting exporting? How do we redress our increasing trade deficit to make sure we’re not buying more than we’re selling?

Therein lies the huge gap in this budget – there are no such incentives.

Building blocks of the economy: SMEs could stand to benefit from increased lending and Government support outlined in the 2010/11 budget

Perhaps it has finally dawned on Mr Darling that increased business lending was desperately needed. The ongoing improvement in market conditions is creating new opportunities for businesses all the time, and businesses can use this protection to secure funds for reinvestment and hiring new staff – but nobody’s steering the boat – a point I made after the last pre-budget report.

However, today’s help comes, admittedly, as a nice surprise, but we’ve yet to see the finer details about about how the Government will distribute this new help, and how companies will be qualified for funding.

As the saying goes “To qualify for a loan you must first prove that you don’t need it.”

How true. In pursuit of securing funding, many businesses incur accountancy and quality assurance fees that go with the due diligence processes needed to qualify their needs and prove they are viable. That can often dissuade companies from applying for funding, as sometimes the extra cost simply isn’t worth it – that is, if you know where to look and who to ask for said funding.

So, I look forward to seeing how these extra measure set out in the budget will be carried out in practice.

Now, when we started this blog we said we wouldn’t use it as a political soapbox. We would instead hold true to our values, promoting common sense and best practices for businesses who want to expand with localization. We also said we’d only mention the economy whenever appropriate for our audience.

Judging by the headline of this article, and indeed the opening paragraph, you could be forgiven for thinking that isn’t the case here, but you’d be wrong. My tone simply stems from my frustration about the lack of help afforded to businesses in the worst recession in over 60 years – that and the annoying little fact that we’ve been asking for this kind of help for over a year, without success.

So, to whoever is promising to help UK industry this week or indeed at the time the next Parliament is formed, may I please ask that you put our money where your mouth is – or just where businesses can get to it?

And yes, by that I do mean our money.