As part of his Autumn Statement on December 3rd, Chancellor of the Exchequer George Osborne has pledged to make £900 million in funding available to small and medium businesses in the UK.
These pre-budget plans outline a contribution of £500 million towards bank SME lending through the Funding for Lending Scheme (FLS). The other £400 million is set to be invested in businesses through Enterprise Capital Funds.
On top of this, the Chancellor has announced plans for a review into the ‘outdated’ business rates system in 2016.
How does the Funding Lending Scheme help small businesses?
The FLS is an initiative providing financial incentives for banks and building societies to lend to SMEs, with participants drawing £5 for every £1 of net lending to small businesses. This scheme, originally introduced in July 2012 has now been extended until January 2016.
Speaking on these proposals, Mr Osborne said: “The Government’s long-term economic plan is working with the Funding for Lending Scheme playing a vital role in supporting the recovery.
“Now that credit conditions for households and large businesses have improved, it is right that we focus the scheme’s firepower on small businesses, which are the lifeblood of our economy.”
What other improvements do SMEs want to see?
Speaking on behalf of British firms ahead of the Autumn Statement, the Federation of Small Businesses (FSB) outlined key Government improvements that need to be made.
John Allan, National Chairman of the FSB, said: “Businesses want an Autumn Statement that delivers stability and certainty, and provides them with incentives to grow and create employment.”
Besides addressing the need to reform business rates, other demands include simplifying the tax system, investing in economic growth outside of London and the South East by improving transport links in Northern England, and creating a faster digital infrastructure for SMEs across the UK.