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UK’s Small Businesses ‘To Be Offered Growth Loans’

Small businesses will be offered new ‘growth loans’ by the government as part of the prime minister’s efforts to get the economy out of the doldrums.

Liz Truss announces in the Mail on Sunday an extension of the government’s Start-Up Loans program – which provides support and funding to new businesses – to cover companies that have been around for five years.

Created to help businesses in their earliest stages, the Start-Up scheme has provided more than 90,000 loans since its inception in June 2012.

Liz Truss announces in the Mail on Sunday an extension of the government’s startup loan program

The loans are subject to a fixed interest rate of six percent, and the program offers support — and discounts on products for businesses — to those who may find it difficult to get money from traditional lenders.

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In her article, Ms. Truss says, “I stand with everyone who takes responsibility and does the right thing, from starting their own business to working hard and striving for a better life for themselves and their families. Our clear plan will help them thrive.

“I know how difficult it is for small businesses. They are the lifeblood of our economy. When small businesses succeed, Britain succeeds too.’

Company Secretary Jacob Rees-Mogg said: ‘Stimulating entrepreneurship and new businesses to thrive is critical to growing the economy and raising living standards’

Company Secretary Jacob Rees-Mogg said: ‘This government is relentlessly focused on boosting growth to create better jobs, raise wages and fund our vital public services such as the NHS.

Encouraging entrepreneurship and new businesses to thrive is critical to economic growth and raising living standards. From a hair salon in Wales to a furniture store in Northern Ireland and a cake seller in the Lake District, the extension of the Start-Up Loans scheme will support these small businesses through this challenging period and position them to grow – creating jobs and opportunities all over the world. the UK.’

By Glen Owen

Source: Whatsnew2day

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92% of SME leaders call on government to do more about inflation

As costs and inflation rise to record levels, small and medium-sized businesses across the UK are urgently calling for Britain’s new Prime Minister, Liz Truss, and her cabinet to provide them with more support.

A poll of 250 British SME leaders reveals an incredible 92% think the Government must do more to support small and medium sized businesses during this period of unprecedented difficulty.

The survey, commissioned by technology provider, Babble, identified the five biggest issues keeping SME leaders awake at night:

  1. Rising inflation costs impacting profit margins (58%)
  2. Retaining customers and clients (46%)
  3. Winning new business (39%)
  4. Impacts of Brexit on importing and exporting (24%)
  5. Providing exceptional customer service (22%)

SME leaders in the North West are particularly concerned with inflation pressures, with three-quarters (75%) of respondents from the region listing it among their biggest worries. Meanwhile, two thirds (65%) of business leaders in the East Midlands are losing sleep over retaining customers and clients, as SMEs struggle to compete. Delivering good customer service when the business is stretched is a particular concern for leaders in the north too, with 31% in the North West and 30% in the North East citing it as one of their biggest worries.

Following the last few years of pandemic-induced chaos, the healthcare industry (73%) is understandably one of the sectors most concerned about the impact of inflation, alongside arts and culture (78%). Investing in new technologies is another key concern for the sector, with a third (33%) of healthcare SME leaders saying so.

The impact of Brexit is still weighing heavily on small businesses too – manufacturing (50%), architecture and engineering (37%), healthcare (33%) and retail (24%) leaders each had it among their top four concerns, with worries around the effect on imports and exports.

Calls for cost-cutting support
When asked what support they’d like to see the Government provide to British SMEs, respondents overwhelmingly voted in favour of measures tackling rising costs. Over two thirds (67%) would like a cap on business energy bills, similar to household energy bills, whilst almost half (44%) want to see work done to reduce rapidly rising insurance premiums, especially on mandatory personal indemnity insurance policies. Other methods of support SME business leaders would like to see include:

• Corporation tax remaining at 19% regardless of business size (35%)
• Reintroduction of the furlough scheme through the initial recession period (27%)
• Reintroduction of the Brexit Support Fund for SMEs who are exporting to Europe (22%)
• Faster rollout of Building Digital scheme so all businesses have fast broadband (20%)

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Tech investment key to navigating trouble
With support so far unforthcoming, British SMEs are having to consider which areas they should invest in to successfully navigate this period. Over half (57%) plan to invest in new technologies to stay ahead of competition, though a quarter (23%) said they would have to scale back on spending plans. When asked, business decision makers are most likely to invest in:

• Software to improve customer experience (48%)
• Cloud technology to improve hybrid and remote working (38%)
• Increased protection from cyber attacks (31%)
• Initiatives to keep staff morale high (29%)
• Software to manage HR and recruitment processes (20%)

Commenting on the findings, Babble’s CEO, Matt Parker, says “SMEs are the backbone of the UK’s economy. But instead of being able to dream big, they are being kept awake at night worrying about how they’re going to navigate the next twelve months and it is clear they are going to need more support to do this. Whether it’s reducing costs long-term, ensuring greater customer service, stronger defences against cyber-attacks or promoting greater collaboration between teams, cloud technology provides the answer.

“At Babble, we’re passionate about working with SME leaders to find the solutions to these issues and seeing small businesses thrive. As the country enters a new era of leadership, we’re determined to see SMEs up and down the country get the support they need and make the right investments to allow them to dream big for the future of their business.”

Babble is committed to powering business up and down the country, aiming to provide a local service to its customers, with the all the benefits of a national provider. The company supports over 10,000 organisations across a range of sectors and has over 250 staff located nationwide.

This makes Babble a natural partner for Ride Across Britain, an annual 980-mile bike ride from Land’s End to John O’Groats. As lead sponsor, Babble is demonstrating its support for clients across the UK, reflected in the cross-country route, as well as fundraising over £500,000 for charities, The Prince’s Trust and The Buffalo Foundation.

By Serena Haththotuwa

Source: Business Leader

UK SMEs
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Majority of Europe’s SMEs relying on loans due to slow or missing payments

Europe’s small and medium enterprises (SMEs) are suffering from significant payment issues, but lack a thorough understanding of the processes involved, new research from Banking-as-a-Service (BaaS) provider Vodeno has revealed.

The company commissioned an independent survey among 2,004 senior decision-makers in SMEs across the UK (504), Belgium (500), France (500) and the Netherlands (500). It found that just 37% of respondents understand what a payment rail is and how it works.

Only 10% of SMEs said that payments are processed instantly, while 11% said that the process happens within the hour. Most commonly, (35%) international payments take between two and three days to reach SMEs, with 11% waiting between four and six days, and 4% waiting between one and two weeks.

The long processing times for payments is causing major problems.

More than half (52%) of the SMEs surveyed have failed to meet commitments due to slow payment processing, while even more (54%) have been forced to take out a loan as a result of missing payments that caused a disruption to cash flow.

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According to Vodeno’s research, the majority (62%) reported that delayed and unpredictable cashflow is the biggest challenge their business currently faces. The same number (62%) said that costly foreign exchange rate fluctuations contribute to a significant drain on their resources.

Looking ahead, the vast majority (68%) intend to adopt real-time payment processing capabilities in the next 12 months, with 62% saying their SME must urgently modernise its payment processing capabilities.

Tom Bentley, CCO of Vodeno, said: “Long settlement times, delayed transactions and a lack of transparency in the payments space can cause headaches for businesses – particularly small and medium enterprises (SMEs) who typically have fewer reserves to draw upon when disruptions occur. Our research shows that these organisations rank missing payments amongst their most significant challenges, with many taking drastic measures to stay afloat.

“In the current macroeconomic climate, cash flow can mean the difference between survival and insolvency, and unpredictable payment processing is the single biggest disruption to business operations. Banking-as-a-Service (BaaS) offers new innovations, better solutions, and the ability to make real-time payments a reality for more businesses.

“At Vodeno, our technology automatically identifies the most appropriate payment rail for any given transaction, offering the most cost effective and fastest settlement to our clients.”

By Paul Skeldon

Source: Internet Retailing

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SME survey reveals financing drought which is stalling growth as RLS loan deadline passes

More than one in five (22%) small and medium sized enterprises (“SMEs”) that needed external finance and/or capital over the last couple of years were unable to access it.

Indeed, over a quarter (27%) have had to stop or pause an area of their business because of a lack of finance. This is according to new research commissioned by Manx Financial Group PLC (AIM:MFX), the financial services group which includes, amongst other operating subsidiaries, Conister Bank Limited (“Conister”), Conister Finance & Leasing Limited and Blue Star Business Solutions Limited.

The research showed that the biggest barriers faced by SMEs in sourcing external finance/and or capital were that it was too expensive (23%), the process took too long (19%) and that there was a lack of flexibility with repayment terms (17%). SMEs also cited other barriers such as the fact that the lender didn’t understand their business (16%) and that they received poor customer care (10%).

The research also revealed that SMEs have been forced to pause or stop activities such as expanding into new markets, hiring the right personnel and marketing, because of lack of financing. Manufacturing, Finance & Accounting, Retail and IT & Telecoms were the sectors that were affected the most because of a lack of external finance and/ or capital.

Over the next 12 months, nearly two in five (38%) SMEs believe Sales will be the biggest areas of business that will see growth followed by recruitment (19%), new product development (18%) and new market expansion (17%).

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The research also highlighted that a third (34%) of SMEs are concerned that their business will not grow in the next 12 months. However, with appropriate external finance, SMEs on average believe their business could grow by around 17%.

Douglas Grant, CEO of Manx Financial Group PLC said, “The research sadly reveals what we have been observing for some time – that SMEs continue to struggle with accessing finance and that worryingly, this lack of availability will cost them and the UK economy in terms of growth at a time when it is needed the most. The amount of growth that is being sacrificed is however significant and will require new solutions which are designed to address this funding gap.”

On 6 April 2021 the Recovery Loan Scheme (“RLS”) was launched. A new Government-backed initiative designed to help facilitate businesses’ recovery and growth after the disruption caused by Covid-19, allowing firms of any size and sector to apply for funding of up to £10 million from accredited lenders.

Conister was approved in August 2021 as a British Business Bank accredited lender for the RLS. It enabled Conister to extend the support it has provided to SMEs throughout the Covid-19 pandemic. The scheme deadline is today (30 June) meaning capital-starved SMEs, still recovering and adapting to a post-pandemic landscape, will need to source alternative forms of lending.

Some sectors of the economy are recovering more rapidly than others. For those still struggling sectors, they require an additional government intervention, but for the remainder, no further Government intervention is necessary.

Grant added, “We were delighted to have been accredited for the RLS last year. The programme provided the necessary catalyst that many sectors required to thrive.

“However, this lifeline is now going and demand for working capital is set to soar to new highs as more businesses desperately require liquidity provisions to counteract record inflation levels, rising interest rates, supply chain issues, increases in wages and additional pandemic-induced headwinds. With the cost of borrowing set to increase, many SMEs are facing their own cost of living crisis.

“A sector focused government-backed loan scheme which brings together both traditional and alternative lenders to guarantee the future of our SMEs in struggling sectors, is critical to ensure that opportunities for their growth are not missed. We very much hope this is something that becomes a reality.

“In the meantime, all SMEs would be well-advised to take stock of their current capital structures and, if appropriate, access fixed term, fixed rate loans to prevent additional exposure to an increasingly volatile lending market.”

By Lib Finance Reporter

Source: London Loves Business

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Small and medium sized Kent businesses supported in moving to green

Kent County Council (KCC) has launched a new voucher scheme to enable local businesses to implement green solutions to help with future growth.

The Green Recovery Voucher Scheme is part of the C-Care (Covid Channel Area Response Exchange) project which is funded by the EU Interreg France (Channel) England programme.

C-Care represents a total of €6.7million package of covid-recovery support from the European Regional Development Fund. The overall project aims to support businesses and individuals at risk of exclusion on both sides of the Channel. In Kent the focus is on business support and this new scheme is being launched as a method to help businesses bounce back and become more resilient.

The Green Recovery Voucher Scheme can help firms build back from the pandemic in a way which is sustainable for the environment. They can redeem a voucher worth up to £1,500 for green goods and services in the following areas:

  • Design, supply and installation of energy efficiency measures.
  • Review, development and supply of waste reduction interventions.
  • Review, development and supply of sustainable transport solutions.
  • Design, supply and installation of biodiversity solutions.
  • ‘Net Zero’ transition planning.

Services will be provided to Kent businesses by a framework of approved green service providers which is also benefiting a number of firms across the county.

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The scheme is targeted at Kent businesses which have been impacted by the pandemic and which can demonstrate how adopting new green solutions will help them recover and grow in a more sustainable and economical way.

KCC’s Cabinet Member for Environment, Susan Carey, said: “Part of Kent’s identity is our strong network of small and medium enterprises.

“The Green Recovery Voucher Scheme is key to supporting firms to build back from the pandemic in a way which is sustainable for the environment.

“This is a fantastic initiative to look into at a time when profit margins are being squeezed and I would encourage business owners to see how this could help them.”

The voucher scheme is now live and will run until March 2023, or until the voucher budget has been fully allocated. Certain eligibility criteria apply, and companies can obtain more information by visiting https://www.kent.gov.uk/business/business-loans-and-funding/green-recovery-vouchers where they can apply and request an initial consultation with an advisor.

The Green Recovery Voucher scheme is being run by the Sustainable Business & Communities Team at Kent County Council, alongside a suite of other sustainable grant programmes available to SMEs (small and medium enterprises) within Kent. For further information on the teams’ projects, visit the Low Carbon Kent website: https://lowcarbonkent.com/

By Ellis Stephenson

Source: KCC Media Hub

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Alternative finance ‘becoming vital’ for SMEs in north

THE ability for small businesses in Northern Ireland to access alternative forms of finance has become a vital factor in their successful growth, the head of a Belfast accountancy firm insists.

Since the financial crash and credit crunch, the funding void left by traditional lenders has been filled by boutique funders and alternative finance, which can allow SMEs to access finance for a variety of different needs, from long term investment through to funding for short term working capital.

But according to Conor Walls, managing director at Exchange Accountants, the key to small firms securing successful alternative financing is to understand what their requirements are and to know what’s on offer, so that they can secure the best possible deal for their business.

With the continuous improvement in technology and the ever-growing popularity of online banking, banks and building societies have continued to close branches across Northern Ireland, and by the end of 2018 over 43 per cent of bank branches available in 2010 will have shut.

“As a result, businesses have had to adjust to the reality that accessing finance from traditional lenders has become much more difficult, and the ability for SMEs to access finance to grow their business is no longer a simple case of hoping the local bank manager likes the ‘cut of your jib’,” Walls says.

“Businesses can access alternative financing through a range of different forms, but most commonly it is secured via friends and family, peer-to-peer lending, angel investors, venture capital investors, crowd funding, equity finance, invoice financing and asset finance.

“Funders will often have key criteria which must be satisfied before any finance is provided, and borrowers can expect to be required to explain in detail what the growth potential of the business is and how the money is going to be used, as well as showing how they will be able to repay the borrowings and what security the borrowers can offer.”

He added: “The financial world is constantly evolving, and it’s no surprise we’ve seen local businesses embrace alternative finance.

“In recent months we’ve found ourselves working with clients to access alternative finance for a variety of needs, from loans in excess of £100,000 for long term investment through to funding for shorter term working capital requirements”, he added.

Funders will often have key criteria which must be satisfied before any finance is provided, and borrowers can expect to be required to explain in detail what the growth potential of the business is and how the money is going to be used, as well as showing how they will be able to repay the borrowings and what security the borrowers can offer.

Securing alternative finance may appear to be a daunting prospect to the uninitiated, but according to Walls the most important step business owners must take is to educate themselves on the pros and cons of each method of funding and ensure they are as prepared as possible.

He added: “Having a real understanding of what’s on offer is crucial to securing successful alternative financing, and I advise every business owner to ask questions and consider their options.

“We spend a lot of time working with our clients to help them secure the funding that suits their business needs. This ranges from identifying their value proposition, preparing profit and loss and cash flow projections to show funding requirements and, more importantly, the ability to repay any borrowings, through to preparing an application and meeting with a funder on their behalf.

“The key to successfully securing alternative financing is to know what your requirements are and to arm yourself with the knowledge to identify the best possible deal for your business,” he added.

Established in 2011 with officers near Belfast City centre, Exchange Accountants provides a range of accountancy services and tax advice to a wide variety of locally based SMEs and individuals.

The company has developed a specialism in digital and cloud accountancy services and was the first accountancy practice in the north to be recognised as a Gold Partner with market-leading cloud accountancy software provider Xero.

Source: Irish News

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A Quarter of Small Businesses Would Cut Staff if They Couldn’t Access New Finance

According to new research commissioned by ground-breaking financial utility, Saxo Payments Banking Circle, SMEs are facing potentially fatal challenges in accessing finance to support the growth of their business.

“Since the financial crisis began in 2008, mainstream banks have been less willing to lend, particularly to smaller enterprises and this has forced SMEs into an unfair fight for the finance they need to compete effectively,” explained Anders la Cour, co-founder and Chief Executive Officer of Saxo Payments Banking Circle. “Our research found that lack of access to additional finance would force 25% of SMEs to let employees go. Nearly a third (30%) would have to reduce prices to encourage sales and increase cashflow, and 39% would be unable to buy the equipment the business needs.”

Over 500 financial decision makers and directors in SMEs that have an online presence responded to the research commissioned by Saxo Payments Banking Circle. Almost all (92.5%) have accessed business finance within the past five years, but many have experienced difficulties in borrowing from their usual bank.

Interest rates and fees were the biggest concern, with 58% saying they would consider finance from a non-bank if it offered lower interest rates. 44% would do so for lower arrangement fees. 25% would be attracted to a non-bank by simple online account management.

The reason for SMEs going into battle for finance varies, but buying equipment was the most common reason why they needed extra cash – for 52.9% of SMEs. Purchasing inventory came in second place (34.5%), followed by expanding into new markets for 27.5%.

The most common type of finance used was a one to three year loan, taken out specifically for the purpose. The second most common type of finance was an overdraft. And, whilst likely to be more expensive than other finance facilities, 60% of SMEs with 10-49 employees said they had relied on their overdraft within the past five years. Without that essential facility they would have had to take drastic steps to cut costs.

Ability to access finance quickly is essential for small businesses working in a fast-paced market and trying to compete effectively. However, the Banking Circle research painted a worrying picture of the length of time firms wait to get their hands on the cash their business needs. Just 3% managed to get the finance arranged within a week. 33.3% took 1-2 weeks and 36.3% waited 3-4 weeks for the finance to be arrange. 2.1% of SMEs waited up to six months for their finance – a small percentage, but representing almost 120,000 businesses across the UK.

“SMEs play a vital role in the global economy, and anything holding them back from their potential could have a severe and far-reaching impact”, continued Anders la Cour. “The business landscape is changing, and traditional lenders are not able to keep up and meet the needs of SMEs. Only financial institutions willing to adapt to new market conditions, working with third-party providers in an ecosystem model, will remain competitive and successful in the digital age.”

Source: Bobs Guide

SMEs funding
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55 per cent of UK SMEs unable to access all funding needed to grow

Research from Liberis, a leading small business finance provider, published today, 21st February, revealed that over half of UK businesses are unable to access the funding needed to grow; with the main hindering factor being a lack of education or understanding of their funding options. With falling SME confidence in the economy and mounting concerns over costs given the relative weakness of the sterling, Liberis strongly urges the UK to better support its small business community.

The lifeblood of the UK economy, SMEs contribute more than £200bn a year; with this number expected to grow by almost 20 per cent by 2025. Yet, without a vital cash injection, this 2025 vision will be severely stinted.

Hindering growth opportunities, this lag in SME development may in turn negatively impact the economy. Liberis therefore believes it is crucial to ensure better understanding on how to navigate the perceived minefield of funding options. Small business education is desperately required to increase awareness levels of the process; greatly benefiting both businesses and economy alike. Such movement has been reinforced in a recent report from the British Business Bank, in which the UK Government backed organisation pledges its dedication to a more targeted educational campaign on the topic of SME finance.

While 62 per cent of UK SMEs said they need funding to grow and expand, but 57 per cent of SMEs were unsure which provider to obtain funding from and 53 per cent did not have a set amount in mind when looking to access finance.

Liberis found 22 per cent of businesses require funding to maintain business as usual, while 5 per cent need funding to survive past the first year of business. Speed of funding has been identified as integral to achieving this growth. Other findings of the report showed an increase in the popularity of crowdfunding as a source, with 10 per cent of UK SMEs looking to use this as a means for funding in the next two years.

Commenting on the report, Rob Straathof, CEO at Liberis, said: ‘These findings have opened our eyes to a lack of confidence and awareness among SMEs in how to correctly secure the funding they so desperately need. Funding will continue to be a hot topic for the small business community, but urgent action and collaboration is crucial to prevent resulting damage to the UK economy. Without sufficient financial education and support, the UK’s business ambitions will be severely affected but by ensuring they have the correct financial understanding, we can help secure and strengthen their livelihood; fast-tracking their ambitions.’

Source: London Loves Business

Small Businesses
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Small Businesses Are Optimistic About the Future

The overwhelming majority of small-business owners (84%) are confident in the future of their business, according to a new study produced by the National Small Business Association and ZipRecruiter. More than half (53%) of the 1,633 small-business owners surveyed said that their revenue has gone up. That’s the first time since 1997 that the majority of companies reported an increase. The results are largely encouraging, though owners weren’t without worry.

“In the past two years, the number of small-business owners who say they expect to see an economic expansion in the next year has more than doubled,” said NSBA President Todd McCracken in a press release. “Unfortunately, the ever-rising cost of healthcare remains the biggest challenge small businesses face.”

The state of small-business jobs

Jobs and hiring practices were a major focus of the report. One of the key findings — that automation does not necessarily mean fewer jobs — differs from what’s expected to happen at many large companies.

The survey showed that only 9% of the small-business owners who plan to implement some type of automation believe that doing so will allow them to employ fewer people. Almost 1 in 4 (24%) said automation will cause them to need more workers and the majority (67%) said it will not impact their employee count either way.

In addition, small-business owners believe that the gig economy will not impact how many full-time employees they hire. While 37% have added part-time employees, 70% of them were new hires, and only 17% were current full-time employees who were reduced to part-time.

The survey also had some good news for employees. Over half (58%) of small-business owners said they raised wages in 2017 and 64% said they expect to in 2018. Nearly a third of those surveyed (32%) noted that they were having trouble finding qualified applicants due to the tight labor department.

“We tend to think of corporate America when we think of career ladders, however small businesses have ample opportunities for career growth,” said ZipRecruiter Chief Economist Cathy Barrera in the press release. “66% of all small businesses offer opportunities for promotion, and at companies with more than five employees, that number rises to 85%.”

What does this mean?

Strong small businesses are good for the economy and good for workers. They give people options and create opportunities that otherwise may not exist.

In order to continue this strong market for small business, it’s important that the government address healthcare. That was named by 32% of those surveyed as their biggest challenge to their future growth and survival. That was tied with economic uncertainty and followed by lack of qualified workers at 26%.

Still, despite those concerns, small business is thriving and confidence among owners is high.

Source: Yahoo Finance UK

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British banks simplify SME account opening process

A group of British banks have come together to simplify the account opening process for small businesses, working with trade body UK Finance on a checklist of details and documents firms will need for their applications.

A Competition & Markets Authority investigation into the retail banking market recently identified the account opening process as a barrier to switching for some small and medium-sized businesses.

In response, 18 business bank account providers have standardised the basic set of information that they require customers to provide when opening or switching an account.

Working with the banks, UK Finance has created an online guide, including a streamlined checklist, outlining the essential details and documents that most small businesses will need when applying to open an account.

Anne Pieckielon, director, product and strategy, Bacs, says: “said: “As operators of the Current Account Switch Service, we welcome today’s announcement and believe it is another important step towards simplifying the account opening and switching process.

“We know that small business owners are busy enough without the need to deal with further layers of time-consuming admin which, in many cases, could deter some from getting the very best deal from their business account.”

Source: Finextra