Last month the Government’s enterprise tsar Lord Alan Sugar made some comments about small business owners being moaners which caused a great deal of upset within the business community. However, Lord Sugar has spoken out to insist that his comments were taken out of context.
In a new article for the Forum of Private Business, he writes: He writes: “The majority were cases where it wouldn’t have been right for the bank to lend in the first instance, owing to things like having a poor business case, a lack of security or simply unrealistic expectations. The Government has always made it clear that it only expects banks to lend to viable businesses. Inappropriate lending in a large part precipitated the global financial crisis. When I started my business career there was no question of going to a bank to get money to set up a business. The reality then, and now going forward, is that the banks want to do business, but they will expect sound business cases to be put before them. It would be both unrealistic and undesirable to expect them to lend as freely as they did over the last 10 years.”
Lord Sugar continued: “In my business career, when I found a bank wouldn’t lend to me, I went back to my proposals, took account of what I was being told and reworked my plans to get the finance. The banks proved a good barometer of the advisability of my plans.”.
In response to the article, Phil Orford, chief executive of FPB commented: “When Lord Sugar’s comments hit the headlines last month, I was one of the first people to take issue with them. However, Lord Sugar insists his words were taken out of context and I applaud him for taking the time to set the record straight. I still can’t say I support his views on the credit conditions currently faced by small firms – I think the problem is much more widespread than he realises. But at least he cares about his perception among small firms and has made the effort to address their concerns through our magazine.”