In the past few years, many proposals have been put forward as “miracle” cures for the economic situation. However, it has become increasingly apparent that growth is reliant on the businesses which operate in the UK – and this, of course, includes SMEs which have struggled to remain afloat throughout the crisis.
Now a report by enterprise adviser to the Prime Minister, Lord Young, aims to build up small businesses so they can perform vital roles in kick-starting the economic recovery. He believes that, by providing support and adequate funds to SMEs which are failing to acquire bank loans, both the economy and UK employment can benefit hugely.
He explains; “If just half of the UK’s micro businesses took on an additional member of staff, unemployment would be reduced to almost zero.
“We need to raise the aspiration and confidence of these businesses and give them the tools to grow.”
In the report, Lord Young voices the opinion that expanding the start-up loan scheme will allow small businesses to channel funds into expansion while retaining the ability to take on further employees.
He also believes that offering these start-ups £230 billion worth of Government contracts on top of existing schemes is the best way to stimulate growth – after all, a loan must be paid back but contracts boost both experience and business capital.
Furthermore, he believes that the age cap for start-up loans (currently 30) should be removed, so more mature business owners and entrepreneurs can gain access to the funds.
At present eligible businesses can apply for a loan which is typically worth £4,500, and the scheme’s popularity has become apparent with 3,768 approved applications since its launch last autumn.
Yet while many small business owners would likely approve of these, and other, incentives listed in the report, not all figures in the business world have given Lord Young their backing.
While the Federation for Small Businesses largely welcomed the report and the thoughts behind its recommendations, head of policy Graeme Fisher questioned whether some of the policies would complicate matters.
According to him, adding a further wealth of offers to the business support market could become highly confusing and prevent business owners gaining access to the help they are entitled to.
Additionally, he expressed doubts as to whether the schemes listed in the report would be capable of changing the small business landscape in a real or fundamental way.
Lord Young has also come under fire for insisting that it has never been easier to start a business than it is today.
Do you think small businesses would benefit from further support initiatives, or should the focus be more on helping small business owners discover what benefits they are already entitled to?
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