Finance needed for small firms to grow
Whether it says more about their marketing spin skills than their truly innovative new ideas is a moot point. If nothing else, it shows we are attracted to charismatic people with passion (think Levi Roots) ̶ even better if it perpetuates an overnight 'rags to riches' myth to a celebrity-obsessed nation.
The perceived wisdom is that tomorrow's great ideas will come from small- and medium-sized enterprises (SMEs) run by people who are innovative and agile, while prepared to put in a lot of slog to ensure their success. It will require the success of these nascent businesses for the government and the Food and Drink Federation (FDF) to achieve their shared vision of growing the UK food and drink industry by 20% by 2020.
But does the business framework exist to encourage these entrepreneurs? And are they receiving the assistance they need?
The FDF welcomed the Budget's lowering of SMEs' National Insurance bills to provide them with a greater incentive to invest in growth. It also applauded the cut in Corporation Tax and planned fuel duty, the government's new Agri-tech strategy and the increase to 10% in the above the line research and development (R&D) tax credit. However, it also pointed out that the R&D tax credit scheme remained tortuously complicated for SMEs to access.
Probably the biggest obstacle SMEs face, however, is getting access to finance. The reluctance of banks to lend money continues to inhibit growth. And a solution is urgently required.
