Small business needs to be an election issue
The SME sector can play an even more important part in the recovery and growth of the New Zealand economy. Picture: Paul Kane With an election looming, every small businesses in New Zealand needs to lift their voices and be heard, asking each electoral party what they will be doing to help the SME sector. Paul Kane, a partner in New Zealand accounting firm Grant Thornton, said that for a sector that plays such an important part in the New Zealand economy, it is plaqued by a defeaning quietness. “Businesses employing five or fewer staff make up about 84% of New Zealand enterprises and businesses employing fewer than 50 staff make up nearly 99% of enterprises. “Yet, when it comes to the Budget or elections, what do you hear from small business? Normally, very, very little. Minority groups of all shapes and size are out beating their drums, but small business seems to be paralysed by stereophonic silence. “Most small business owners obviously do not know what other countries do for their small to medium enterprises otherwise they would be up in arms,” he said. The United States, Canada, the United Kingdom, India and Germany, to name but a few, all offer assistance to the SME sector. “One of the best examples and one that could be easily copied in New Zealand, is the United KingdomÕs Enterprise Finance Guarantee (EFG), which is a targeted measure intended to facilitate additional commercial lending to viable SMEs unable to obtain a normal commercial loan due to having insufficient or no security. “EFG facilitates lending that would not otherwise be available by providing lenders with a partial guarantee,” he said. Kane said that undercapitalisation is perhaps the biggest single reason for SMEs to fail in New Zealand. “The number of new businesses that […]