An examination of non-bank external funding for small and medium-sized enterprises in the UK

This article reviews recent developments in the provision of long-term external funds to small and medium-sized firms in the UK; particularly, it attempts to establish how far the actions taken by a group of institutions, the specialist financial intermediaries (SFIs), have remedied perceived defects in the intermediation process. The activities of the SFIs are compared with those of the clearing banks, and the impact of government initiatives in this sphere is examined. While progress has undoubtedly been achieved in supplying external funds in amounts exceeding £250,000, attention still needs to be directed towards raising less than that figure and, especially, below £100,000.