The Spring Statement was a mixed bag for small businesses. There were long-term positives but little to address immediate concerns. The big question for many companies is, “how do we balance the books now?”

The Chancellor announced a number of measures that will deliver benefits for small businesses in the mid-to-long term but short-term help was thin on the ground. Much of the criticism of the Statement has been focused on this imbalance.

Where small-firm support opportunities were missed

While changes to the basic rate of income tax, the employment allowance, R&D tax credits and the national insurance threshold have been widely welcomed by the small business sector, many of the benefits won’t be felt for some time.

The cut in the fuel duty is immediate, but whether it is enough to make a meaningful difference to small businesses, in particular vehicle-reliant ones, remains to be seen. And then there is the case of national insurance reform. The new tax will come into force as scheduled but the threshold has been lifted – in effect both increasing and cutting national insurance.

Another area where immediate help could have been provided is business rates. While the confirmation of the 50 per cent discount for retail, leisure and hospitality sector is a positive, it is clear that more could have been done to provide relief for small businesses in this area. And then there is the decision to not extend the VAT discount for retail, leisure and hospitality sector firms.

Immediate cashflow problems and how to address them

The government has said it will work closely with small businesses to identify further potential support measures ahead of the Autumn Budget. This is encouraging but it offers little in the way of relief to firms that fear they might not be around in October.

Small businesses need help to manage cashflow now and this is where alternative finance comes in.

Cashflow management and how alternative finance can help

For smaller firms, in particular those that are really feeling the pinch, access to finance will be critical to surviving in 2022 and beyond. The services of alternative lenders should be part of this financial planning.

In the wake of prolonged caution from traditional lenders, which is an issue that has returned during the pandemic, services such as invoice finance, asset finance and peer-to-peer lending, are proving a vital source of capital for small businesses, both for maintaining cashflow and for essential investment.

These facilities, which offer a more easily accessible and personalised approach to lending, are helping small businesses survive and target recovery and regrowth.

Furthermore, alternative lending is playing a prominent role in the government’s headline emergency support scheme, the Recovery Loan Scheme (open until the end of June 2022). Invoice finance and asset finance between £1,000 and £10 million per business are available under the initiative. This profile is helping cement the reputation of alternative finance in the business sector.

Staying afloat in 2022 and small firm finance options

The Spring Statement has offered small businesses help but arguably not where it is needed the most – in the here and now. Longer-term assistance will mean nothing to firms that fail to see in 2023. To avoid this scenario, it is important that owners and directors are aware of all the small business finance options available to them, including the services of alternative lenders.

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