It appears that this year’s statement will see the prayers of small businesses answered as the Chancellor intends to deliver a package of funding plans designed to aid SMEs.
George Osborne is expected to announce the extension of a number of policies which have already been implemented by this Parliament, along with introducing new initiatives allowing small businesses an increased level of access to financial support. In total, this package is expected to be worth just under £1 billion for SMEs.
One of the most significant funding programmes will see the British Business Bank granted an additional £400 million of funding for the 2015/2016 financial year, helping the state-backed bank push closer to its target of unlocking £10 billion worth of SME finance by 2018. In addition, the Enterprise Finance Scheme is also expected to benefit from extra funding, thereby allowing it to lend £500 million to growing small firms next year.
Although the Chancellor is yet to deliver his Autumn Statement, small businesses are already welcoming these policies as many have struggled to obtain loans or alternative methods of funding since the recession.
The Chancellor also intends to tackle the issue of bank lending by extending the Funding for Lending Scheme (FLS) for an additional year – a policy which was confirmed the night before Mr Osborne delivers his statement.
The FLS was first introduced in July 2012 as a means of providing better credit for households throughout the country but, at the last Autumn Statement, it was announced that the initiative would re-focus towards business lending.
Operated jointly by the Bank of England and HM Treasury, the FLS has proven hugely important in securing bank loans for small businesses although, as indicated by the need for the Business Bank, there still remains plenty to do in this area.
Upon confirming the extension of the FLS, Mr Osborne said; “It is right that we focus the scheme’s firepower on small businesses, which are the lifeblood of our economy.”
Yet while funding packages are undoubtedly very important for small businesses, it is the Chancellor’s forecast alterations to the business rates system which have caused the greatest buzz in the business world.
Mr Osborne is expected to announce a long-awaited review of the business rates system which could finally see system reformed.
