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Why the Autumn Statement failed to deliver on business finance

Rarely has the Autumn Statement been so keenly anticipated: SMEs were just one group looking for support from the Chancellor. However, while an SME bank received further endorsement, no timetable for its launch was given. This uncertainty underlines the role of select invoice finance.

The Chancellor’s failure to provide any concrete details on the establishment of a British Business Bank has dampened enthusiasm for the Autumn Statement among small businesses. Confirmation of support for such an institution, as well as a 1% cut in corporation tax in 2014 and the rise in capital allowances for investment are undoubtedly positive, but there is a feeling that the major issue has not been adequately addressed.

A solution to the problem of SME lending has long been sought by the government and the idea of a British Business Bank, which would bypass the traditional banks and building societies, has been largely well received, with comments suggesting that the government has finally got its hands on an initiative that will benefit small business owners who struggle to secure start-up funding or funding to help maintain cash flow.

Notably, while the Funding for Lending scheme is finally starting to deliver in terms of mortgage lending, there is little evidence of any similar impact on small business lending. Hence, with focus increasingly falling on improving SME credit, it seems surprising that the Chancellor has left the issue of a British Business Bank surrounded by such uncertainty.

More details may be released in time but the Autumn Statement hasn’t been the shot in the arm that the SME sector was hoping for. At the same time, it underlines the importance of alternative finance and in particular the likes of selective invoice finance, a flexible and transparent service that is driving sector growth.

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