The struggle by smaller UK businesses to access finance has been well documented and there is now recognition that these businesses will play a crucial role in kick-starting economic growth.

Smaller companies are the life-blood of the economy. 99 per cent of the UK’s 4.8 million businesses employ less than 250 people, and 50 per cent of the UK growth is driven by this community.

This means that the UK fundamentally relies upon small- to medium-sized businesses to act as an engine room to propel growth to the rest of the economy.

But the problem for SMEs is wider than simply the restricted access to funding and the ability to increase debt levels

SMEs are at the sharp end of supply chains and so often find themselves waiting to be paid by bigger companies, an issue that the Government and media has latched onto. It is an issue that more lending from the banks will not solve.

In times of economic uncertainty even the stronger growth companies struggle to keep cash on their balance sheets to fund their own development and provide for future uncertainty, or they tend to conserve cash for the proverbial rainy day.

The result is cash strains flow down the supply chain and the very smallest businesses find themselves choked for cash.

Growth is stifled; investment stops and new employment opportunities are suppressed from bottom to top.

The Government’s Funding for Lending Scheme was intended to reduce the cost of lending for businesses and so reduce uncertainty and stimulate growth.

But as the evidence shows, this scheme hasn’t been taken up to the extent that people had hoped and doesn’t seem to be providing the support needed by small and medium sized businesses.

Latest figures from the Bank of England show a £300m reduction in lending in the first three months of 2013.

This contraction is despite a £16.5 billion Bank of England hand-out to lenders since last August.

It was always a large demand to ask banks to start to lend more, when they in turn have to deal with the fall-out of the fiscal crisis and the need to repair their own balance sheets.

They are further restricted by largely being secured lenders against the equity in owned assets: as asset values declined, equity reduced and loan to value declined.

All of these factors contribute to the squeezing of the availability of funding.

The banks also have to accommodate the requirements of European legislation which actually makes it more expensive to lend to the SMEs.

What was once the traditional source of finance is now not quite as reliable as it once was.

In times like these, what is needed is innovation and this inevitably comes from the private sector.

We need to look to innovative financing schemes that drive liquidity to the SME growth sector.

The UK business community has woken up to the idea that we can stimulate the UK economy through alternative forms of finance.

We have seen the entry of various new players, with some offering specific quick, affordable and flexible funding products and others the full range of financial services.

However, most of the solutions that have been put forward by these challengers are debt or quasi-debt solutions, which although they provide short term results for businesses, do so at what cost?

It is hard to imagine that a debt crisis can be solved by piling on more debt to already struggling balance sheets.

It is this issue that encouraged us to launch URICA. Through institutional funding and government investment, we give the option to UK SME suppliers to be paid early with cash, not debt.

This strengthens their balance sheets and eases cash flow pressures, giving businesses the confidence to make day-to-day, operational decisions and improves the customer’s supply chain in the process.

We, like these other new and innovative products, are faced with the challenges of changing a business mindset towards wanting something they perhaps do not yet realise they need.

As Henry Ford commented "If I had asked people what they wanted, they would have said faster horses."

The challenge is to release cash into the supply chain to those businesses that fundamentally need it and often do not have any other resource to find it than from their customers.

I strongly believe the better placed businesses need to expand their mindset and use their position and strength to support their suppliers.

This will be to the benefit of all through stronger relationships and increased confidence, allowing SMEs to find support beyond traditional forms of bank lending that are more suitable for their business needs.

The unprecedented challenges facing both the lenders and small businesses require fresh thinking and innovation. The business community needs to look beyond the horse and not revert to an old fashioned reliance on debt.