The Spring Statement has been well received by the small business sector, but could the chancellor have done more to help SMEs, especially with regard to late payment?
In the run up to the Spring Statement, small businesses were crying out for action on late payment. The chancellor delivered, announcing that there will be a review into an issue that, according to the Federation of Small Businesses, closes an estimated 50,000 businesses every year and costs the economy £2.5 billion annually. The move has been applauded and rightly so, however, small business owners won’t be hanging out the bunting just yet. Talk of combating late payment has rarely been followed up by meaningful action.
Nevertheless, the mention of the issue at such as level is an indication that it is being taken seriously. Furthermore, the Spring Statement included positive news with regard to business rates, training, apprenticeships and tax and VAT. In short, after a series of disappointing Budgets, there is a lot more for small businesses to be optimistic about.
That said, SMEs will be mindful of the timetable attached to the governments promises. At the moment, there is no information on when a review of late payment, might take place and white the next business rates revaluation has been brought forward, it still wont take place until 2021. It is very much the case that small businesses need help sooner rather than later.
The Chancellors statement with regard to economic growth underlines the urgency surrounding assistance for the small business sector. While the growth forecast for 2018 has been increased, at 1.5% it remains low, and perhaps most tellingly, the forecasts for the years ahead, already lower, have been further reduced. This suggests that conditions are set to remain challenging as Brexit-borne uncertainty continues to negatively impact the market.
With this outlook in mind, for all the optimism attached to the |Spring Statement, there is the sense that a few more details and a little more urgency could have gone a long way to assuring SMEs that the help they need will arrive in time. Because it seems clear that businesses will need all the resources available to them in order to successfully navigate some choppy economic waters in the coming years.
These resources have to include an awareness of and easy access to alternative finance, which is helping small business raise capital to fund vital investment and maintain cash flow. For example invoice finance is being used to manage the impact of late payment, white peer-to-peer lending is a means of accessing money to fund training and purchase new equipment.
Overall, the Spring Statement has been positive for small business owners and has bought the promise of much-needed action on key issues. Perhaps the next Budget will build on these developments. All eyes are on the government.
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