With the Autumn Budget approaching, tax breaks and better access to finance have become key demands of UK SMEs, according to new research from Bibby Financial Services (BFS).
The latest SME Confidence Tracker shows that while entrepreneurial optimism has recovered post-election, small business leaders are calling on the government to tackle critical financial barriers to unlock growth.
The survey of 1,000 SMEs shows that 68% expect turnover to increase over the next six months, an increase of 7% since March 2024. With inflation stabilizing and interest rates having fallen, 63% of SME leaders now more confident in making capital investments, while 52% are more likely to pursue major investments after the general election.
However, concerns remain about the potential for tax increases in the upcoming budget, with 87% of respondents calling for better tax incentives, and 81% calling for access to low-interest financing to support expansion and job creation.
Derek Ryan, managing director of BFS in the UK, urged the government to keep its promise to small businesses, saying: “SMEs are finally confident enough to invest, but the Prime Minister’s warning of a ‘ painful’ budget threatens to undermine this. Supporting SMEs must remain at the heart of the government’s economic growth plan.”
Access to finance remains a significant challenge, with 49% of SMEs describing the financial landscape as complex, and 80% looking for better educational resources to navigate financing options. Although commercial financing approvals have increased, many SMEs still find the process cumbersome; only 18% have used the Bank Referral Scheme.
The Labor Party’s proposals to improve SME financing through reforms to the British Business Bank and the Bank Referral Scheme are seen as promising, but experts such as Sandeep Dhillon, CEO of SME marketplace Talmix, emphasize the need for immediate clarity on tax policy and financial support. especially for the technology sector, where investments have declined.