Business rates are making headlines again, with the prospect of rising costs being labelled a “tax time bomb”. While there will be extra relief for some firms, many are still looking at higher bills. How can small businesses manage the increase in costs?

On the back of widespread criticism of business rates reform in the last Budget, the government has announced extra relief for pubs and music venues. These firms will see a 15% reduction in bills from April, with the level of rates frozen for two years.

While a positive for pubs and music venues (although some are saying that the new measures don’t go far enough), the decision has highlighted the plight of other small businesses outside of this category, including those on beleaguered high streets, which are still facing a significant rise in business rates – an average of 52% in the retail, hospitality and leisure sector according to the Federation of Small Businesses.

Whatever the dynamics behind last year’s reform package, the move to further reduce rates for a select group of firms suggests that the restructuring needs to go further if it is to meet small firm expectations of affordability. Tellingly, the Federation is lobbying for a rise in the business rates threshold from the existing rateable value of £12,500 to £25,000.

How alternative lenders can help with accessing finance

Given the headwinds small firms are facing and the impact on profit margins, the prospect of larger business rates bills is an added pressure that many will find very hard to manage, not least as demands on cash flow continue from a range of other sources, including in relation to cyber-security, decarbonisation and digitalisation.

In such a climate, if small firms are to pull off this balancing act, access to finance is critical. Crucially, the challenge is made even greater by ongoing caution from traditional banks when it comes to small business lending. This is where alternative finance can help.

Small business lending from traditional sources remains subdued in 2026, with almost 40% of firms finding accessing affordable finance one of their biggest challenges. Notably, there has been a call for the introduction of legislation that would require banks to increase access to low-cost lending for small businesses.

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.

Small firm finance options for managing business rates rises in 2026

Notably, in providing extra relief for pubs and music venues, the government has hinted that more help with business rates may be offered to other small firms later in the year. If this is the case, the further restructuring of the tax system can’t come soon enough for many businesses.

However, there are no guarantees and with the prospect of larger bills looming large, it is vital that small firms have the access to finance they need to manage the impact on cash flow. This is why it is important 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.