As the autumn budget approaches, tax benefits and improved access to finance have emerged as key needs from UK SMEs, according to new research from Bibby Financial Services (BFS).
The latest SME Confidence Tracker reveals that while business confidence has rebounded after the election, small business leaders are calling on the government to address tough financial constraints to unlock growth.
A survey of 1,000 SMEs found that 68% expect sales to increase in the next six months, up 7% from March 2024. With inflation stabilizing and interest rates low, 63% of SME leaders now feel confident more by making financial investments, while. 52% are more likely to pursue a major investment following the General Election.
However, concerns remain about tax increases in the upcoming budget, as 87% of respondents want better tax incentives, while 81% encourage the availability of low-interest loans to support growth and job creation.
Derek Ryan, BFS UK Managing Director, urged the government to honor its commitment to small businesses, saying: “SMEs are finally feeling confident enough to invest, but the Prime Minister’s warning of a ‘brutal’ budget risks undermining this. Supporting SMEs must always be at the heart of the government’s plan to grow the economy.”
Access to finance remains a major challenge, with 49% of SMEs describing the financial situation as complex, and 80% seeking better educational resources to navigate funding options. Although trade finance approvals have increased, many SMEs still find the process difficult, with only 18% using the Bank Referral Scheme.
The Labor Party’s proposals to improve SME funding by reforming the British Business Bank and Bank Referral Scheme appear promising, but experts such as Sandeep Dhillon, CEO of SME marketplace Talmix, stress the need for immediate clarification on tax policies and financial support, especially in the technology sector, where investment has slowed.