Joseph Blass, CEO, WorkPlaceLive describes how SMEs can address lending issues by changing their approach to IT procurement and moving to a cloud-based model.
Bank lending to small and medium sized enterprises dropped in the first quarter of this year. Figures released by The Bank of England at the end of May 2014 showed that lending to SMEs under the Funding for Lending (FLS) scheme was down by £700 million compared with last year. Chancellor George Osborne recently urged the UK’s biggest banks to increase competition in lending to small and medium-sized businesses to boost the economy, stating that smaller companies still feel that they are being shut out by the banks when it comes to lending.
Many small businesses are also struggling with cash flow problems. A study from Santander Corporate & Commercial published in May, found that almost one in six small businesses in a UK-wide study are ‘very’ concerned about managing cash flow effectively over the next 12 months, with a further 27 per cent saying they are ‘quite’ concerned. One answer to the problem is vendor finance – short-term loans offered by vendors to familiar customers to enable them to buy assets including IT equipment and ease their cash flow requirements.
However, another and perhaps better solution is for them not to require the IT equipment in the first place. Just as businesses lease cars rather than buy them, or pay energy bills rather than buying generators and fuel to operate them, the same trend is happening in IT.
WorkPlaceLive 
There appears to still be a hangover from the recent credit crisis – I’ve noticed it a lot with the effects on training and a leaning towards contracting, which in some areas may still be an issue.
Cloud is definitely a good idea and possibly, unlike Big Data/Hadoop won’t also involve the costs of hiring specialists to use it, it’s just a simple outsourcing tool.