The 2014 Budget was a good one for small businesses, with a focus on export finance, investment funding and energy costs, but the Chancellor missed an opportunity by leaving alternative finance on the fringe.

Although the government has promised to create a £500 million Builders Finance Fund, which it hopes will unlock housing development projects that have stalled because of problems accessing finance, there was little mention of alternative finance and its role in nurturing SME growth, beyond a repetition of interest in the sector.

With traditional lenders maintaining a cautious attitude to SME lending despite government efforts to improve access to small business finance, it had been hoped that the 2014 Budget would include measures that would definitively underline the increasingly important role of alternative finance services such as invoice finance, peer-to-peer lending and crowdsourcing. Also missing was any action on business rates.

Nevertheless, the 2014 Budget had plenty of positives for small businesses, most notably a move to make the Seed Enterprise Investment Scheme permanent, a doubling of the annual investment allowance to £500,000 and a rise in research and development credits for loss-making companies, as well as a package to cut energy bills for UK manufacturers.

The government has much staked on the SME sector fulfilling its role as a growth generator. The outlook is encouraging, not least owing to the continued expansion of the alternative finance sector, including the recent formation of the Alternative Business Funding platform; however, only time will tell whether enough has been done to provide small businesses with the finance to turn this optimism into real growth.

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