Despite sustained campaigning and legislative reform, businesses rates remain a major thorn in the side of the small business sector. For many, the rates are crippling. So how can these firms manage the costs? Alternative finance can help.

The release of new official data on the amount of business rates collected in 2018 has brought a fresh call for system reform from the Federation of Small Businesses amid concern for the pressure the cost is putting on small firms. According to the new figures, business rates worth £25.3 billion were collected in 2018, a £900 million increase over the total for 2017.

The FSB’s renewed concern comes as no surprise. Businesses both large and small continue to close or downsize and one of main reasons regularly cited is business rates. High streets around the country have been particularly hard hit, with independents and chains disappearing at an alarming rate.

The decision by Marks & Spencer to shut scores of shops and the closure of the House of Fraser are just two examples from 2019, while most recently, it has been reported that Jack Wills is facing a cash crisis and Thomas Cook has had to seek a rescue deal.

The importance of business rates and the need for further reform is further underlined by the fact that the issue has become something of a political football. Promises being made by politicians include those to scrap business rates for nine out of ten high street shops, saving each business up to £6,500 a year, and to cut corporation tax to 12.5%. Such moves would be welcomed by the small business sector but there is no guarantee that these promises will become reality.

So, what can small businesses owners do help them manage business rates costs? Alternative finance can help.

In the wake of prolonged caution from traditional lenders, a position that Brexit is helping to entrench, alternative finance facilities such as invoice finance, asset finance, peer-to-peer lending and crowdfunding are proving a vital source of capital for small businesses, both for safeguarding cashflow and for essential investment.

This is how a small business in Sussex used peer-to-peer lending, through a commercial finance broker that specialises in alternative finance, to raise the capital to invest in new equipment.

It is clear that small businesses urgently need relief from the pressure being applied by business rates. However, the timetable for any such assistance remains uncertain. Nevertheless, for businesses to survive and grow, they need to manage the costs. To do so, owners need to be aware of all the funding options available to them, including alternative finance.

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