After weeks of fevered speculation, the Budget almost felt anti-climactic, for small firms at least, because the worst fears of many business owners proved unfounded. There’s plenty to chew over, but the big question remains, how can firms fund growth in 2026?

A mixed bag – what was key for small businesses?

What is clear is that small businesses weren’t the main focus of the 2025 Budget. Overall, there are pluses and minuses for firms, making it something of a mixed bag, but perhaps the bigger picture was the provision of a firmer sense of clarity (something that has been lacking).

Starting with the big ticket items, there was movement in relation to business rates, with permanently lower rates to be introduced for retail, leisure and hospitality firms. Whether this goes far enough, in particular for beleaguered high-street businesses, remains to be seen.

As expected, the Minimum Wage for those over the age of 21 will rise from April next year. While a boost for lower-income workers, the increase is a worry for employers, in particular when combined with the decision to freeze tax and national insurance thresholds. Many will see it as putting yet more pressure on cash flow (and let’s not forget the reform to employment practices that is due to be introduced through the Employment Rights Bill).

On a more positive note, the cost of apprenticeships for under 25s will be free for small firms, which should increase more opportunities to develop future talent. Reform to Enterprise Management Incentives schemes and Venture Capital Trusts has also been welcomed, with the widening of eligibility considered a means of supporting innovation and growth.

How alternative finance can help small firms fund growth in 2026

There are more measures that can be dissected and debated with regard to their impact on small businesses, but perhaps what is equally as important about the Budget is what wasn’t in the Chancellor’s speech, in particular in relation to key tax increases.

Nevertheless, pressure remains on small firms to fund growth in a difficult climate. And this is where alternative finance can help.

Small business lending from traditional sources remains subdued in Q4 2025, with almost 40% of firms finding accessing affordable finance one of their biggest challenges. Against this backdrop, services such as invoice finance, asset finance and peer-to-peer lending are proving a vital source of capital for small businesses in the current funding climate.

These alternative finance facilities, which offer a more easily accessible, affordable and personalised approach to lending, are helping small businesses survive and target recovery, stability and growth.

Notably, the Growth Guarantee Scheme is providing a wide range of finance facilities to smaller firms, including asset finance, invoice finance and asset-based lending. This is further proof that alternative lenders are increasing filling the small business funding gap.

Finance options for post-Budget small firm development

The dust is settling, and putting right-wing hysteria to one side, the overriding emotion from the small business sector with regard to the Budget, for now at least, is probably relief. The measures certainly require some unpicking, but perhaps what is most important for small firms is that they have a clearer picture of what lies ahead, and less uncertainty is always a good thing.

That said, the challenges for small businesses remain very much in place – access to finance will be critical to funding growth and this continues to be challenging, with traditional lenders still taking a cautious approach. This is why it is vital that key-decision makers are aware of all the available finance options, 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.