UK small businesses receive boosts from Autumn Statement
Chancellor of the Exchequer George Osborne announced a lending package worth nearly £1 billion to boost bank lending to small and medium sized enterprises.
In the Autumn Statement, George Osborne confirmed plans to provide a boost to small and medium sized enterprises (SMEs). Furthermore, numerous new tax incentives and breaks aimed at promoting smaller firms were announced.
The Treasury has promised to invest in fast growing SMEs with £400 million of Enterprise Capital Funds, which are government-backed venture capital funds. It also guaranteed that new bank lending will be increased by up to £500 million.
George Osborne, the UK chancellor, said: “Now that credit conditions for households and large businesses have improved, it is right that we focus the scheme’s firepower on small businesses, which are the lifeblood of our economy.”
Small businesses will receive numerous tax breaks
The British Business Bank will be expanded with a year-long extension of the Funding for Lending Scheme announced exclusively for SMEs to further boost bank lending to small firms.
Research and development tax credits for SMEs will be increased by 230 per cent and small business rate relief will be doubled for another year.
Any inflation-linked increases in business rates will be capped at two per cent and shops, pubs and cafes will be pleased to hear their discounts upped by 50 per cent to £1,500.
Further support for exporters was provided with the promise of a £45 million package for those looking to trade with economies in Asia, Africa and South America.
Since the economic downturn in 2008, SMEs have struggled to receive lending from banks despite the government providing stimulus measures in an effort to promote the flow of liquidity.
However, the government believes initiatives like the Funding for Lending Scheme has helped cut bank funding costs since its inception in 2012. The Bank of England and Treasury believe the extension of the scheme should work alongside various other long-term initiatives that should help SMEs acquire bank lending.