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Why the Autumn Statement must feature alternative finance

The new Chancellor will soon make his first Autumn Statement and amid the Brexit-bred uncertainty, SMEs will be keen to see some affirmative action on their behalf. Raising awareness of alternative finance should feature.

While calls for SME-related action in the 2016 Autumn Statement have focused predominantly on an increase in the VAT registration threshold and the Annual Investment Allowance, and deferring Making Tax Digital reforms, Phillip Hammond would do well to help further raise the profile of alternative finance and services such as invoice finance, asset finance, peer-to-peer lending and crowdfunding.

Hammond is expected to freeze the reduction in corporation tax, a move that will be perceived by many as increasing the already significant financial burden on small businesses. The costs linked to auto-enrolment, cybersecurity, wage reforms and apprenticeship legislation are weighing heavy on a sector that must also contend with the market instability caused by Brexit and the lack of clarity surrounding its execution. Hence, the need to show support for SMEs. Raising awareness of alternative finance certainly fits the bill.

In the past, the government has made much of the importance of the small business sector to the economic health of the country. The sector’s ongoing reinvigoration must be nurtured. For example, if, as expected, the Autumn Statement includes increased spending and support for infrastructure and housing, businesses involved with railways and road infrastructure will want to take advantage of any financial stimulus.

For these companies, having the right financial management strategy in place will be critical to realising such potential and with banks continuing to take a cautious position with regard to small business lending, services such invoice finance and asset finance have a clear role to play in helping them do so. That’s why the Autumn Statement needs to feature alternative finance and focus on raising awareness of the services available to firms.

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