Small business owners are still missing vital funding as the Business Growth Fund launched on May 19th.

The Government’s launch of the Business Growth Fund (BGF) is aimed at helping growing businesses with a turnover of between £10m to £100m, but small business owners believe the initiative will do little to help them access funding, according to research from business software and services provider Sage UK.

Despite widespread publicity, the BGF has attracted controversy, with a number of influential businesses commentators criticising the scheme. The initiative has also received a luke-warm response from small business owners, with 62% of respondents to Sage’s monthly Omnibus of over 1,000 SMEs stating it would have little to no impact on the overall picture of bank lending to business.

Brendan Flattery, CEO of Sage UK, which has 800,000 customers in the UK, commented: “Whilst initiatives like the Business Growth Fund are at least a step in the right direction, the criteria set for application to the fund means that relatively few businesses can actually benefit. Opening up finance to established businesses with a turnover of £10m or more is hardly a step-change to the status quo, where banks remain highly conservative, and risk averse in their lending."

Tracy Ewen, managing director of IGF, said: "“The bad news is that it ignores anyone with a turnover of less than £10 million, which accounts for a high proportion of UK SMEs. Also investment capital is only part of the story. It is the day to day funding that many SMEs are struggling with. On the upside however, for those businesses that do turn over £10 million or more this scheme provides long- term financing as opposed to going to a venture capitalist which will likely want a quick return on investment.”