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How can SMEs fund growth after a flat Spring Budget?

Hopes weren’t particularly high but the Spring Budget has left many small businesses disappointed. The need for support is clear but little was forthcoming. So, how do firms maintain cashflow and fund growth going forward?

Where small firms were short changed by the Spring Budget

While the reaction from the small business sector to the current Chancellor’s first full Budget has varied, a common response has been frustration at being overlooked at such a critical time.

The fuel duty freeze and the increase in relief on draught beer have been welcomed, in particular by firms with sizeable fleets and the hospitality sector, as has the extra help with energy bills for swimming pools, but there was little else for small businesses to get excited about.

As widely predicted, the energy price cap is happening and while the new funding for R&D focused businesses is a positive, the way it is designed means that only a small number of companies will be able to benefit, mostly larger ones, with a great number of smaller firms left out in the cold.

Again, while it is good that the government seems to be committed to its measures for the over 50s, it is questionable what impact such policy will have, with many labelling it a token gesture.

And even the increase in childcare support, which is a key area for many small businesses, comes with a major caveat – the rise doesn’t come in until 2025, at which point it seems highly unlikely that the Tories will be in power. There is a lot to like about the plan, but it seems more like a political sleight of hand than a real policy.

In addition, there was little concrete in terms of encouraging the development of digital tech and net zero innovation in the small business sector at time when firms are crying out for support in these areas, and when acceleration in both could have a major impact on the sector and the economy.

Funding SME growth and how alternative finance can help

As the small business sector rues another missed opportunity, attention turns to development planning and how to fund the next steps in this process. It is understandable that many firms are uncertain about investment in the current climate, but finding capital, to safeguard cashflow and for growth, is integral to forward momentum. 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 post-COVID-19 market conditions, services such as invoice finance, asset finance and peer-to-peer lending are proving a vital source of capital for small businesses.

These facilities, which offer a more easily accessible and personalised approach to lending, are helping small businesses survive and target recovery, stability and growth. Notably, alternative lending played a prominent role in the government’s headline emergency support schemes in 2022.

This profile has helped cement the reputation of alternative finance in the business sector, with a recent study showing that more than 50% of small businesses are looking to use finance to achieve growth in 2023.

Building for the future and small firm finance options

In a Budget that delivered more for households and larger businesses, many smaller firms feel short changed. Moving forward, it is clear that is up to them to find the finance solutions needed to survive and achieve growth. This is why it is essential that small businesses are aware of all the funding options available to them, including the services of alternative lenders.

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

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