As the dust settles, the general consensus appears to be that the 2013 Budget was a good one for small businesses. However, with little concrete development surrounding access to SME finance, was it good enough?

A move to simplify tax for small businesses, the cut in corporation tax to 20% by 2015, the cut in employers’ national insurance bills and the freezing of fuel duty are all measures that small businesses will welcome. Furthermore, the Chancellor has given the Bank of England greater flexibility to support business growth.

However, while the affording of greater flexibility to the Bank of England may help strengthen the foundations of a British Business Bank, there were few cast iron developments regarding the establishment of this institution. With access to small business finance still very much a challenge, the lack of forward momentum will be a disappointment to small business owners and it is an issue that underlines the importance of alternative finance products such as invoice finance.

In addition, the role of the Funding for Lending scheme as a tool to boost small business lending was an area in which there was little real progress. The Chancellor acknowledged that the scheme had fallen short of its goals in terms of SME finance but proposed action on the matter didn’t go beyond the pledge to work on improvements. The Business Secretary has been saying the same thing for weeks and has used much sterner rhetoric.

As the British Chambers of Commerce identifies, it is not the businesses that are deemed safe bets by the banks that are in most need of help. The Funding for Lending scheme can lower the cost of finance for such companies, but for those firms that don’t fit into the safe bet category, more is needed. Arguably, this will be the most important role of the British Business Bank.

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