This year’s Budget focused on export and investment in order to drive economic growth. There were several new measures announced that I’m sure our SME clients will welcome with open arms.
On export, the chancellor unveiled plans to double the amount of export finance available through UK Trade and Investment (UKTI) to a total of £3bn. That funding will also be cheaper, at half the previous interest rate. The hope is that this new support will encourage more businesses to look abroad for opportunities to sell British goods.
It’s support that can’t come too soon. We know that cashflow to support export activity is the top concern for businesses considering geographical expansion - and often the reason why they put it off.
Exporters have long complained that the finance options available to them are limited - banks are often unwilling to fund them or will only do so at a higher price.
Over the last few years a number of alternative finance providers, including MarketInvoice, have come in to fill this gap, offering flexible funding options for export. We help hundreds of clients export to over 30 countries around the world.
Manufacturers will also welcome the news that energy costs are to be capped. Energy-hungry factories across the UK will be able to plan cashflow with much more certainty, again helping British firms to think about growth opportunities, including export.
George Osborne also announced that he was doubling and extending the Annual Investment Allowance and confirmed that the Seed Enterprise Investment Scheme (SEIS) would become permanent. These two measures should help many small and medium-sized businesses, particularly early stage and high growth companies.
In the fine print that was released after the main Budget speech there were further encouraging signs that the government is increasing access to finance for SMEs. A consultation was announced to investigate whether banks can be legislated to help businesses find the right finance through alternative lenders.
Encouraging greater awareness of alternative lenders is a great step in the right direction, and something we at MarketInvoice believe will help SMEs to understand the vast range of options available to them.
Another new measure detailed in the Budget is that banks will need to provide information in a timely way (within seven days) if their client wishes to switch to a challenger bank or wants to use alternative finance. Again, this announcement is great news for our clients, making the whole application process smoother and less burdensome.
The 2014 Budget was a good one for businesses - let’s hope that the measures announced have the positive impact we’re all looking for over the coming year.
Anil Stocker is the co-founder of MarketInvoice.com