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Why the Autumn Statement should be big on alternative finance

The Forum of Private Business has called on the Chancellor to cut SME costs ahead of his Autumn Statement. A fine proposal, but SME lending and alternative finance should be the real focus.

While the 2015 Budget is still a long way off, there is already growing pressure for George Osborne to concentrate again on helping improve access to small business finance, not least thanks to the underperformance of the revamped Funding for Lending scheme and the continued cautiousness of traditional lenders.

Hence, while addressing small business costs is important – the Forum proposes cutting small business rates, the application of interest charges to late payments by councils, a cap on fuel duty and investment in encouraging SMEs to export – it is vital that the government takes further action to bolster its support for small businesses, in particular in terms of SME lending.

Alternative finance services are already playing an increasingly significant role in government SME funding policy, and underlining this strategic development towards greater engagement with the likes of invoice finance, peer-to-peer lending and challenger banks in the Autumn Statement would provide a much-needed boost to small business confidence.

In terms of what the Chancellor could do next, small businesses would benefit from help with matching them with specific alternative finance services, as it has become apparent that an increasingly common problem for SMEs is identifying what financial lending product suits them best.
Hopefully the Autumn Statement will include this kind of vital detail.

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