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Chancellor Rachel Reeves has announced new measures to improve SMEs\u2019 access to finance, one of the few initiatives she has delivered for small firms during her two-year tenure at the Treasury.<\/p>\n
While Ms Reeves has focused her attention on infrastructure and institutional funds, SMEs feel they have been largely overlooked or forced to carry the weight of her tax and regulatory burdens.<\/p>\n
The latest support package involves a \u00a32 billion annual expansion of the British Business Bank\u2019s (BBB) Growth Guarantee Scheme (GGS) which provides a 70% government guarantee on commercial loans to SMEs of up to \u00a32 million. <\/p>\n
It aims to reduce credit risk, while the threshold for eligible firms will rise from \u00a345m in annual turnover to \u00a354m.<\/p>\n
Ms Reeves described it as the most significant reform to small business finance in years, and business leaders said it should help SMEs scale and develop more export business.<\/p>\n
It comes ahead of the Mansion House speech on Tuesday that may be her last set-piece address at the Treasury ahead of Andy Burnham\u2019s arrival at Number Ten next week.<\/p>\n
The BBB estimates these changes will support an additional 12,000 businesses per year by 2028\/29, a 150% increase on the 8,000 currently being supported, bringing the total to 20,000.<\/p>\n
Ms Reeves, said: \u201cWe know that small businesses are the backbone of this economy and growth in all our regions, and for too long they have heard \u2018no\u2019 when trying to raise the funds they need to grow and create jobs across the UK.<\/p>\n
\u201cWhen they succeed, we all succeed, and today\u2019s major reforms are the most significant step in years to unleash their potential.\u201d<\/p>\n
Business Secretary Peter Kyle said: \u201cToday we\u2019re putting our weight behind Britain\u2019s entrepreneurs and innovators, unlocking billions in additional lending to help thousands more small businesses start, scale and succeed because access to finance should never be the barrier between a good idea becoming a great British business.\u201d<\/p>\n
Paul Thwaite, CEO NatWest Group, said: \u201cAs the UK\u2019s biggest bank for business, this will allow us to deepen our support for firms, lending in the region of \u00a31bn through the Government Guarantee Scheme over the next three years.\u201d<\/p>\n
Louise Hellem, chief economist at the CBI, said: \u201cExpanding support to more businesses through the Growth Guarantee Scheme, lengthening loan terms and backing IP-rich, innovative companies can help unlock investment in every part of the country. <\/p>\n
\u201cFor many SMEs, the right finance at the right time can be the difference between delaying plans and pressing ahead with new equipment, new markets or new hires.<\/p>\n
\u201cThe government deserves credit for listening to business and putting forward a package that recognises the practical finance challenges firms face. <\/p>\n
\u201cThe priority now is delivery and making sure the support is simple to access, well understood by businesses and effective in crowding in private capital.<\/p>\n
\u201cIf implemented well, these reforms can help more SMEs scale, export and adopt new technologies here in the UK \u2014 supporting productivity, stronger local economies and long-term growth.\u201d<\/p>\n
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