Small Business in the UK would like the government to do more to improve their access to finance, according to a survey by SME lender Iwoca.
The poll comes ahead of the 11 March budget in which the newly appointed chancellor, Rishi Sunak, is expected to turn on the spending taps and increase spending on public services.
In the SME survey by Iwoca, 66% believe that creating policies to make it easier for SMEs to apply for finance should be a priority in the upcoming Budget.
Small businesses have been squeezed since the onset of the financial crisis, with high street lenders significantly raising the bar for SME borrowers or withdrawing from small business lending altogether. According to Iwoca, Bank of England data shows finance to SMEs by the main high street banks has fallen by 6% between 2014 and 2019.
Over one-third of the respondents to the Iwoca poll (35%) said they wanted access to finance to be the main focus of the government over the next five years.
Iwoca said over half (51%) of those surveyed wanted the government to prioritise a review of business rates and 30% backed a further investment in the National Skills Fund.
There was far less enthusiasm by SMEs for the government’s infrastructure commitments which would see it follow through on its ‘levelling up’ of less well off regions.
Only 21% of respondents backed government spending an additional £100bn on infrastructure, with just 16% calling on the government to prioritise the roll-out of full-fibre broadband.
To fund the expected public spending, the business press has been reporting that the chancellor is likely to, not reform, but scrap the entrepreneurs’ tax relief in a bid to bring more funds into the Treasury’s coffers.
Iwoca also said the poll highlighted several policies which SMEs said would increase their cost of doing business. According to the poll:
- 42% don’t want further rises in the National Living Wage
- Over one third (38%) expressed concerns at the freezing of Corporate Tax cuts
- Three in ten (29%) are against the scrapping of Entrepreneurs Relief
Iwoca said that in a submission to HM Treasury, it had highlighted several policies to help lenders provide the finance small businesses need, including reform of the Bank Referral Scheme (BRS). Iwoca said, since the creation of the BRS in 2016, the scheme has only seen 1,695 successful referrals worth just over £32m. Indeed, just one in ten small businesses say they have been made aware of the scheme after they’ve unsuccessfully applied for finance.
Christoph Rieche, chief executive and co-founder of Iwoca said: “We’re on a mission to finance one million small businesses so that they can thrive, create jobs and make our communities flourish.
“We hope the Chancellor will use his first Budget to make it clear that he’s backing the 5.9 million small businesses that drive our economy forward by removing barriers that hold them back.
“We would welcome the opportunity to work closer with the Government to ensure their actions match the needs of small businesses up and down the country.”
The survey results are based on answers from 482 respondents from Iwoca’s small business customers. The poll was held from 20-27 February.