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What will a new prime minister mean for small businesses?

The country will have a new prime minister in September, but what will the change at Downing Street mean for small firms? What will happen to business policy and will small firms get the support they need?

PM candidates make big promises for small businesses

The remaining candidates for prime minister are busy campaigning for the job and notably, business policy is high up on the agenda – all sorts of promises are being made. Cutting taxes is a common theme, including reversing the hike in corporation tax and reducing it to 15%, scrapping the increase in National Insurance and introducing a five-year freeze on business rates in the most deprived areas.

Such pledges have no doubt caught the attention of small business owners and management, who have been battling unprecedented headwinds throughout 2022 and would gladly welcome the easing of pressure on cashflow in the form of tax cuts and business rate freezes.

However, at the same time, it is likely that small firms are taking these pledges with a hefty pinch of salt. Election-time promises often get diluted or forgotten altogether and it is worth noting that the promise to scrap the National Insurance hike is being made by people who supported the introduction of the policy, even in the face of widespread opposition.

Balancing the books and how alternative finance can help

Relying on the promises of politicians is a risky business and while the reforms being mentioned by the candidates would be welcome, it would be unwise to rely on their introduction. As such, small firms need to have their own robust planning in place. Key to balancing the books is access to finance and this is where alternative finance can help.

In the wake of prolonged caution from traditional lenders, which is an issue that has returned during the pandemic and amid challenging market conditions in 2022, services such as invoice finance, asset finance and peer-to-peer lending are proving a vital source of capital for small businesses, both for maintaining cashflow and for essential investment.

These facilities, which offer a more easily accessible and personalised approach to lending, are helping small businesses survive and target recovery and regrowth. Furthermore, alternative lending has played a prominent role in the government’s headline emergency support scheme, the Recovery Loan Scheme, which closed in June. Invoice finance between £1,000 and £10 million per business was available under the initiative. This profile has helped cement the reputation of alternative finance in the business sector.

Safeguarding cashflow and small firm finance options

It remains to be seen who will take the No.10 hot seat in the autumn and whether he or she delivers on the promises to cut taxes and freeze business rates. As such, to stay afloat and maintain forward momentum at a time of extraordinary pressure, it is important small firms are aware of all the finance options available to them, including the services of alternative lenders.

To find out more about A&T Business Associates services, contact Steve Bowles on 01903 602211 or steve.bowles@atbusinessassociates.co.uk.

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