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Business rates reform: part of new SME finance era?

Business rates reform is in the news and the proposals being put forward, against the backdrop of a revolution in business lending, suggest that SME finance is entering a new era.

Business rates have long been a point of contention for small businesses, which have complained that they are out of date and cumbersome and act as a barrier to investment and job creation. The rates were set in 2008 before the credit crunch stopped economic growth in its tracks.

Among the proposals for reform are those from the British Retail Consortium, which has suggested basing taxes not on property but on alternative metrics, such as energy consumption. The underlining feeling is that there is a chance to think progressively about business rates and establish a system that encourages SME growth.

The talk of reform comes at the same time as historic changes in the SME lending sector, with alternative finance services, such as invoice finance and peer-to-peer lending, moving into the mainstream. The shift is being fuelled in part by a continued go-slow in bank SME finance and in part by the flexibility and transparency of the alternative small business finance products.

It remains to be seen what approach the government takes to business rates reform and in particular how plans to offer small retailers a discount on payment will inform the reform process. With the SME finance sector benefiting from progressive thinking, retailers will be hoping for a similar breakthrough.

To find out more about A&T Business Associates services, contact us on 01903 602211 or info@atbusinessassociates.co.uk.

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