Borrowing can be a nightmare, even for long-established businesses - finding supportive, honest lenders is key to growth.
(PRWEB UK) 4 April 2013
SME owner managers feel the recent Budget didn’t provide enough immediate relief for startups and growing businesses, with measures providing long-term incentives to invest rather than immediate help.
This was the conclusion of a round-table panel of small business leaders convened to look at the outcomes of the Government’s Budget last week, organised by the leading provider of flexible work space for growing businesses, Avanta Managed Offices.
Attendees’ unanimous call was for immediate business rates relief for startups, to help their cash flow and to keep their business alive. Crispin Reed, Senior Consultant at The Career Practice, commented: “To encourage business growth this year, the Government needed to implement measures that help businesses now, not in 2014.”
Host Rachel Bridge kicked off the debate by questioning whether the announcement of an employment allowance of up to £2,000 off employer's National Insurance bill will help. The consensus was that it would not. Gillon Campbell, founder of brand consultancy, Principal Ingredient, commented: “SMEs won't complain about the "jobs tax" cut, but it is not a huge incentive to grow a business. It will have more impact on profitability than in driving recruitment.”
Access to funding proved to be the hot topic of discussion, with SMEs in agreement that the process needs to be improved to encourage startups. Arpita Dutt recently founded employment law firm, Brahams Dutt Badrick French LLP: “Getting funding which does not put you and your family at risk when starting a business is a huge challenge – we explored numerous options, which took a huge amount of time during the crucial set-up stages. The whole process needs to be simplified for startups otherwise people may fall at the first hurdle”. Alan Pepper, CEO of Avanta Managed Offices, is in agreement: “Borrowing can be a nightmare, even for long-established businesses - finding supportive, honest lenders is key to growth.”
Gillon Campbell commented: “The reality is that the complexity of the funding and taxation processes is a fiasco. The Government has been in ‘tweaking territory’ with the measures aimed at SMEs for too long – it is going to take a huge simplification, and big bold move to make an impact.”
The panel were in agreement that the cut in Corporation Tax will have very little impact on UK SMEs or startups. Charles Purdy, founder of Smart Currency Exchange, commented: “The cut is good news if you are an established business but will have little effect on smaller players in the field.” Arpita Dutt went as far as to call for a reversal to standardisation of Corporation Tax rates: “I see no reason why we cannot go back to when this tax was assessed by size or turnover of company, in order to give SMEs a fairer start. The current system is not encouraging growth in the UK.”
Rachel Bridge concludes: “The Budget has provoked a strong reaction from Avanta’s small business panel, who feel that while there are lots of measures to encourage long term business growth and investment, failure to offer immediate support in areas such as business rates or access to funding means that many SMEs may not even be around to benefit.
"Our panel is in complete agreement that now is a great time to start a business because succeeding, or keeping an even level, in the bad times gives them a great chance of success when the economy improves. But the feeling is that there are too many immediate barriers that stop a business expanding or starting up in the first place.”