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Entrepreneurs destroyed by lack of IT credit

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Internet Security Threat Report 2014

Britain is being robbed of its next generation of businesses as entrepreneurs report their planned ventures are being "delayed or destroyed" by the difficulties they face raising capital or credit to purchase essential IT kit, recent research claims.

Almost two-thirds of the 500 UK entrepreneurs questioned in the poll (some 61 per cent) blamed raising credit funding as the greatest threat to innovation.

More than a third (38 per cent) of respondents reported that funding difficulties are preventing them from obtaining essential business IT infrastructure, and so preventing them acquiring a vital "reputation driver" for their businesses. According to the poll, entrepreneurs said customers expected that they would have IT systems and an online presence at a minimum. They also claimed that a lack of IT equipment would severely curtail their ability to run their business and attract customers.

This compared with only 21 per cent who said that the biggest issues caused by lack of funding were failure to secure premises (21 per cent) and those who said support staff were the top priority(19 per cent).

So far, so good, or apparently not so good for Britain's budding entrepreneurs. However, we note that this survey was commissioned by none other than PC World, the computing arm of Dixons Group.

Simon Turner, group managing director, PC World said: "During the dot.com boom, it was possible to secure early-stage funding from many sources virtually on a whim. Nowadays, even getting base level financing for IT equipment is a tortuous process that may be robbing the British economy of exciting new enterprises."

So what, we hear you cry, can possibly be the answer to the funding crisis facing budding startups wanting to get IT kit on tick? You've guessed it - credit from those nice altruistic people at PC World, who have signed an agreement with Australian business finance outfit RentSmart and the Bank of Scotland.

Under the deal, start-ups will be able to get "immediate access to up to £3,000 worth of leased IT equipment".

However, the small print is not altogether clear about who will be eligible for this line of credit - specific individuals or the actual company - as PC World states that funding will be made available after a credit check on one company director. Details of rates and specific financial terms were not included in PC World's announcement.

The PC superstore says the leasing deal will be available "without the onerous requirement to demonstrate a trading history or business plan". While it's true that trading histories can be hard to come by for start-ups, we can't help wondering if a business plan is an onerous requirement - or a jolly good idea. ®

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