It’s Christmas for SMEs, by which I mean the 2016 Budget is coming. So it’s time for small business owners to write their wish lists and pin their hopes on the Chancellor. One present that they all should get is further development of alternative finance.

Talk to business owners and read discussion online and it is clear what they want. And it is not a new message – costs are undermining the SME sector’s ability to grow and provide the wider economic impetus that the government so keenly wants from them. There are calls for the revision of business rates, VAT on small businesses and the pension auto enrolment timetable, as well as for help with the cost and management of new technology, from that relating to pensions to superfast broadband and cyber security systems. In addition, SMEs want better access to graduates, a more workable apprenticeship scheme, a significant reduction in red tape and the removal of barriers to working more with public bodies such as councils and schools.

Will business owners get what they want? It’s all eyes on the chap with the red case. Realistically, not all the wishes will be granted and there’s a good chance that the red case will contain only a few of the presents that they are asking for. But there is one thing that can help SMEs with a wide range of cost-related issues – more investment in alternative finance. By helping SMEs strengthen their financial strategy, services such as invoice finance, peer-to-peer lending and crowdfunding can help these companies better manage their cashflow and the demands on it.

Alternative finance is in the driving seat when it comes to small business finance: a new study, backed by figures from the British Banking Association, has revealed that business bank accounts are costing small businesses £1 billion a year as a result of historically low interest rates at four of the top five banks – evidence that SMEs still can’t expect the best deal from traditional lenders.

Occupying a mainstream role, alternative finance is becoming increasingly important to SME sector growth and it is vital that the government gives businesses every chance to benefit from these services. The ball is rolling in this regard but the Chancellor has a responsibility to maintain the momentum.

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