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Eighteen months on from the government pledging to put small businesses at the centre of economic recovery, the question remains: what has really changed? Ahead of last year’s Budget, our research of business owners found that less than a third (31%) of UK SMEs felt the government was doing enough to support businesses like theirs. In London, confidence was higher at 53%, but quickly evaporated in the aftermath. Just one in five (20%) SMEs in the capital said the Budget did what it needed to, and almost a third (30%) felt that there was nothing in it that would help them solve the challenges they faced. As we look toward the 2025 Autumn Budget, just under half (49%) of London SMEs retain confidence that the government will drive a pro-business agenda. But despite lots of headlines about the perilous state of the UK, the reality on the ground is quite different. While there is undoubtedly some caution about growth prospects, businesses of all shapes and sizes are pretty optimistic about their future growth. Their challenge isn’t a lack of ideas or ambition, it’s that the conditions around them haven’t kept pace. Crucially, SMEs don’t need or want more reviews, strategies, or bureaucratic tinkering. What they need is delivery - specifically on the fundamentals that will help them overcome the near-universal pressures: higher costs, squeezed margins, and uncertainty over the direction of fiscal policy. In practice, this means affordable access to finance, a level playing field in the funding ecosystem, and a roadmap for growth that gives them confidence to invest, hire and expand. To build an environment that supports, short-, medium-, and longer-term growth, three core principles must sit at the heart of all government and industry decision-making for businesses: ● Finance that works for SMEs: The tightening of the UK lending landscape from larger institutions has left too many SMEs struggling to access affordable finance, holding back investment and growth. But in a world in which digitisation and connectivity are now the default, there’s little room for lending to be a laggard. Fostering greater collaboration between big banks and specialist lenders can be transformative in how finance reaches SMEs. For example, embedding finance at the point of purchase to meet SMEs where they do business can ensure they secure lending at the press of a button. This minimises friction, speeds up decisions and ultimately means the industry can deliver agile funding channels that are open, fair, and sustainable. ● Clarity and reassurance: The biggest barrier to growth isn’t always cost, it’s uncertainty. While policy reviews undoubtedly have a place in planning, too often they can act as an impediment to SME decision-making. What SMEs need is consistency, and the reassurance that their strategic planning won’t be upended by shifting priorities or short-term politics. SMEs would most benefit from a sustained period of consistency, less red-tape, and clearer signals, actions, and policy-making from the government so they can plan, invest and grow; creating the jobs and innovation the UK economy relies on. ● Cross-party commitment: The UK’s businesses are often relied upon as a political barometer, with parties hawking their wares to SMEs each election cycle. This use of businesses as ‘bargaining chips’ is undoubtedly harmful and only undermines the innovation of today and tomorrow. What’s needed is cross-party commitment and consistency that sustains across electoral cycles. As the HS2 project has shown, this is hard to achieve.But the policy see-sawing has been hugely damaging to sub-contractors and delivery partners. An even more current case in point is digital ID. Done properly, such a system has the potential to radically simplify due diligence for SMEs, cutting compliance costs for lenders, while reducing fraud and ensuring funds go to legitimate businesses. For consumers, we could even see significant efficiencies in areas like securing mortgages or opening bank accounts, reducing delays, and improving confidence in financial transactions. To reap its rewards, this is a project that will require a commitment of consecutive parliaments and full-throated collaboration with the already enthusiastic business sector. No mean feat, but it is achievable. Crucially, failure to seize the opportunity, or a mid-project mothballing, would leave the businesses at a global disadvantage for generations. The UK is brimming with potential, and the innovation, ingenuity and passion demonstrated by SMEs across the UK should give great confidence to the government about its growth targets. Businesses just need the opportunity to fulfil their potential. Mike Randall is the CEO at Simply Asset Finance.
