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2015 Budget: all style and no substance for SMEs?

The 2015 Budget was a positive one for SMEs, but as the dust has settled, there is a sense that the Chancellor could have done more, in particular with regard to late payment and alternative finance.

The move to abolish class 2 national insurance contributions, the promise to digitalise tax returns and the pledge to overhaul the business rate system were all well received by small businesses and will tap into the growing sense of optimism in the SME sector. However, with regard to improving access to SME lending, the 2015 Budget was arguably lightweight.

The Chancellor again stressed his intention to improve access to finance and markets and published more details on the Help to Grow scheme, but this is as far as he went in this area. There were plenty of positive soundbites, but little concrete action.

The inclusion of alternative finance services, such as invoice finance, peer-to-peer lending and crowdfunding, in Help to Grow has been widely discussed, but is yet to be confirmed. The prospect is encouraging and government policy in recent years suggests it will take the step, but SME owners need to see action sooner rather than later. According to new figures from UK Bond Network, more than two thirds of SMEs would consider alternative finance as a means of raising capital. The writing is on the wall.

SME owners will be disappointed that the 2015 Budget failed to tackle the long-standing problem of late payment. A new study from the Forum of Private Businesses is a reminder of the urgency surrounding the issue: over 50% of the 4,000 SMEs questioned said that they have experienced significant problems with late payment and over two thirds stated that behavioural late payment is a problem.

SMEs will be pleased with what they heard from Chancellor but they will be hoping that there is substance to these soundbites.

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

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