Finance for Small and Developing Businesses
In the context of financial need, a small business is an enterprise with special problems at all stages in its development. The Bolton Committee on Small Firms decreed a business having 50 to 200 employees to be ‘small’ but size of turnover must also be a factor. For instance, a business with up to £1 million sales per annum in a non‐labour intensive industry, such as wholesaling, could be classified as small. The European Union defines small and mediumsized firms (SMEs) as being those with fewer than 500 employees. Since the Macmillan Committee Report (1931), various committees have investigated the efficiency of the financial markets, particularly their accessibility to small firms; and after each report action was taken to improve the situation. One of the earliest initiatives to provide long‐term finance to small firms was the formation in 1945 of the Industrial and Commercial Finance Corporation (ICFC), which still operates successfully as part of Investors in Industry pic (3is).