Business rates and the burden that they place on small businesses are headline news again in the build up to the general election. Politicians are making lots of promises, but there is a more reliable way of managing the cost.

All three major political parties have pledged a root and branch review of the business rates system. Replacing business rates with a tax on commercial landlords is part of the Liberal Democrats manifesto and the Labour party has promised to introduce similar reform. The Tories have said that they will cut business rates.

The focus on this issue is unsurprising: business rates have long been a thorn in the side of small businesses, with many owners calling them a major barrier to growth. Notably, the business rates system has undergone significant reform in recent years, but the changes have met with widespread criticism, and have largely failed to resolve the problem to the satisfaction of small businesses owners.

So, the promises of the political parties are encouraging. However, as experience has shown, such pledges should be taken with a considerable amount of salt, and it is unlikely that small business owners will put too much stock in them, for now at least.

Nevertheless, the cost of business rates still has to be managed. While reform may appear in 2020 or 2021, the bills need to be paid now. And business rates is not the only bill that needs paying: firms have to find the cash for payments relating to a range of other policy and non-policy measures, including pension auto-enrolment, GDPR compliance, data protection and cyber-security.

News that a quarter of small business owners fear that their companies will go bust in the next five years underlines the financial pressure that these firms are under.

So, what can small businesses do?

Alternative finance can help.

In the wake of prolonged caution from traditional lenders, a position that Brexit is helping to entrench, alternative finance facilities such as invoice finance, asset finance, peer-to-peer lending and crowdfunding are proving a vital source of capital for small businesses, both for safeguarding cashflow and for essential investment. These facilities, which offer a more personalised approach to lending, are helping small businesses grow.

This is how a small business in Sussex used peer-to-peer lending, through a commercial finance broker that specialises in alternative finance, to raise the capital to invest in new resources.

Small businesses desperately need business rates reform. Whether the general election delivers it remains to be seen. Regardless of the result and the timetable of any review, business rates have to be paid and this is why small business owners need to be aware of all the funding options available to them, including alternative finance.

To find out more about A&T Business Associates services, contact Tony Hedger on 01903 602211 or tony.hedger@atbusinessassociates.co.uk.