The long-awaited Small Business Plan, recently published by the UK Government, is a welcome and encouraging statement of intent. While previous budgets and statements have fallen short for SMEs – think of the NI rise as Exhibit A – the new plan is hoped to mark a turning point and recognition that the health of the SME sector is fundamental to the UK’s economic prosperity.
The Swoop team has been particularly pleased to see commitments that align so closely with the core challenges we see our clients face every day. The focus on future-proofing business skills through digital adoption and support for young entrepreneurs is vital. Think of the body-blows that businesses have experienced in the last decade: Brexit, Covid and instability. Survival in this volatile world hinges on being able to roll with the punches and find opportunities behind the grim headlines.
We also love transparency, so the pledge to create a Business Growth Service to simplify advice and a commitment to better public sector contracts for SMEs are steps that will genuinely help SMEs find the support they need and opportunities that have been traditionally harder to access.
The happiest news for me was the commitment to table legislation to end late payments. This is a game-changer. For years, late payment has been a silent crisis, costing the UK economy an estimated £11bn a year and, as the government’s own figures show, causing the closure of 38 businesses every single day. This isn’t just an administrative headache; it’s a structural flaw in the business ecosystem.
When a small business has to wait 60, 90, or even 120 days to get paid, they are, in effect, extending an unauthorised credit facility to a larger business. When businesses come to us for funding, the answer is never “Don’t pay your debts.” This isn’t a sustainable model. It starves the small business of the cashflow they need to grow, hire new staff, or invest in new equipment. The new legislation, with its shorter payment terms and enhanced enforcement powers for the Small Business Commissioner, promises to be the most significant crackdown on this issue in over two decades. This is a crucial step towards creating a fairer playing field.
The plan also includes a number of encouraging measures around funding, from a bolstered mandate for the British Business Bank to new ‘green’ Start-Up Loans. While these are all excellent, I believe the government could go further to truly unlock access to finance. The biggest barrier for many businesses isn’t a lack of funding options, but a lack of awareness and a fragmented application process. The Business Growth Service is a great start, but we need to ensure it’s not just a signposting service. It needs to provide a streamlined, integrated digital experience that helps businesses understand their full range of options, from traditional loans to grants and equity investment.
The commitment to a Code of Conduct on personal guarantees for government-guaranteed loans is also a fantastic development. This will provide much-needed clarity and confidence for entrepreneurs.
Overall, the Small Business Plan is a fantastic foundation. It correctly identifies the major pain points for SMEs and sets a positive agenda for change. The next step, however, is crucial: this plan needs to go beyond the welcome announcements and be implemented. SMEs have been hurting for a long time. If the government can follow through on its promises, particularly on the critical issue of late payments and on simplifying the funding landscape, then the UK’s SMEs will truly be able to feel they have an ally in 11 Downing Street.
