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How SMEs can afford city centre workspaces

It’s important to have SMEs in the centre of large towns and cities. They contribute a lot. But rising costs are pushing them out. Alternative finance can help change this picture.

The London Assembly has warned that small businesses are getting priced out of the capital. It’s a problem that is mirrored in towns and cities across the country. Botched business rates reform and costly utility bills are just a few of reasons why city centre workplaces are fast becoming unaffordable for small business owners.

And this is a big problem.

Small businesses bring a lot to a city or town centre, and not just in financial terms. Of course, they do have their monetary value, with companies and employees using services and playing a strong role in the local economy. But they also bring a vibrancy and vitality that radiates throughout the places in which they are based.

And it’s a two-way street. Small businesses benefit from central locations, in terms of the footfall they need, the positive impact on their profile, the clients they appeal to and the staff that can attract.

Take SMEs out of city and town centres and the money drains away, the environment starts to go stale and small business sector growth is under threat.

How does this fit in which the government’s much stated desire for SMEs to be the engine of economic growth? In short, it doesn’t.

Despite the headwinds, business optimism remains at a decent level – a new survey from the Economist Intelligence Unit showing that London businesses are among the most optimistic in the world is testament to this sentiment – but if small businesses can’t be where they need to be, then turning optimism into cold, hard success is going to be very difficult.

So, it’s clear that the government has to act to stop small businesses being driven out of town and city centres. But small business owners can also help themselves. This is where alternative finance comes in.

Establishing and operating an office or store in a town or city centre comes with significant costs, from finding the initial start-up funding to managing cash flow. Invoice finance, asset finance, crowdfunding and peer-to-peer lending are helping SMEs to do this, but awareness of these services remains an issue.

This is how a management group in the south of England used invoice and asset finance to raise the capital to buy an established business.

It is vital that our towns and cities have small businesses at their heart. They are essential to prosperity. Alternative finance can help ensure this lifeblood is not lost.

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

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