Financing a private sector recovery

Book excerpt: Access to sustainable finance is essential if businesses are to invest and grow. Businesses need finance for both working capital and investment purposes. This paper considers the range of finance options available to businesses of different sizes, and the extent to which market failures may constrain access to finance for some businesses. The impact of the financial crisis on the availability of finance, and whether the current challenges are transitional or structural, is also examined. The paper also considers whether there are risks to the future provision of finance that should be addressed now, so that an appropriate range of business finance is available for viable businesses as the economy recovers. Views are sought to help inform the Government's assessment of, and response to, this important challenge.