Merlin’s lost his wand

accawebmaster —  9 February 2011 — Leave a comment

To bring you a different perspective on some of the SME issues that get mentioned on this blog, we thought we'd bring you some guest posts from small business expert Stefan Töpfer. This is his second post

George Osborne announced £800m of extra taxes on the banks yesterday morning and is later set to announce the banks' commitment to SMEs in the UK – all part of a project called Merlin.

Upon announcing the extra tax on the banks, the banks could not even get excited enough to put out the usual blurb about loss of competitiveness – it felt a little like you or I getting a parking violation ticket for £1!

Furthermore, the banks are to increase SME lending to £190bn – sounds good – until you read the get-out clause that says the business loans must be 'commercially viable'. What does that mean? Who decides what is commercially viable? Is it the same people who decided that sub-prime mortgages where a good idea, which is exactly what got us all into this mess? Whoever said bankers had any business sense?

It is not difficult to see why so many of us non-bankers fail to understand why we are all paying for the mistakes of the bankers, while they seem to profit both personally and in business terms from the inability of our politicians to hold the guilty to account for their bad deeds.

Mixed up in all this is the UK SME sector; a business sector that neither bankers nor politicians understand, and one that is being used as a diversion from the real issues. UK business in the micro segment needs a standardised way of opening bank accounts. The current procedures that are in place are a real barrier to business start-ups; when looking at the small and medium sector banks should be forced to offer loans on project financing, no ifs and buts! It should be easy for banks to finance a project or order vs fixed cost and over heads finance.

These two simple steps would ensure an easier business start-up process and real business growth based on commitment and entrepreneurial activity. There are many other equally simple steps that government could take to help small business, but that would require an understanding of SMEs most politicians can not muster – I'd love to be proven wrong!

Disclaimer: The author Stefan Töpfer is CEO of, a leading cloud-based small business infrastructure provider (small business software, e-commerce  solutions and business process outsourcing). The views and opinions expressed are his and are based on over three decades of personal experience as a serial entrepreneur #1 small business blogger, mentor and angel investor in the SME/SMB sector.


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