SMEs funding appetite surges after Spring Budget
UK SMALL businesses’ funding appetite surged after the Spring Budget, the National Association of Commercial Finance Brokers (NACFB) said, as they rushed to shield their growth plans against rising business costs.
The average value of funding enquiries via the NACFB’s “findSMEfinance” platform increased by more than £5,000 to over £85,700 in the four weeks after Chancellor Philip Hammond’s announcement, which confirmed business tax rates hikes and lower tax incentives for employers taking dividends.
In London, where taxes are expected to increase by at least £900m a year, the total value of finance enquiries rose by almost a third to £10.8m from £8.2m before March’s Budget.
“Several regions of the UK have seen a massive uplift in funding enquiries – even in London, where business rate hikes were expected to hit the hardest, small businesses in the capital have continued to show an appetite for growth,” said the NACFB’s chairman Paul Goodman.
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The leap was much more substantial in East Anglia and Scotland, where the total value of funding requests more than doubled to about £3.2m and £2.5m – a 114 per cent and 104 per cent jump respectively.
Small- and medium-sized enterprises (SMEs) in the North West region also sought 102 per cent more finance after Hammond’s speech, while companies in the South West applied for 51 per cent more money.
Conversely, total funding demand by SMEs in Wales and the South East fell by 82 per cent and 61 per cent respectively. The Midlands and the North East region also saw a drop in demand, by 51 per cent and 45 per cent respectively.
“The bundle of measures introduced by Hammond in this year’s Spring Budget were widely hailed as bad news for the UK’s smaller firms,” said Goodman.
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“Despite the chancellor rowing back on the short-sighted plan to increase national insurance contributions for the self-employed, the sharp rise in business rates for many high-street shops has delivered a hammer blow to businesses around the country.
“Nevertheless, despite this gloomy outlook, the UK’s smaller businesses have proved to be remarkably resilient to some of the Budget’s more punitive measures and Article 50 uncertainty generally.
“In such a climate, it’s encouraging to see overall finance enquiries holding firm and UK SMEs still turning to experienced brokers for assistance.”
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