Better financial support needed for SMEs and start-ups

John Allen, national chairman of the FSB, told FoodManufacture.co.uk that around four in 10 businesses in the UK were struggling to access finance, with one in five citing it as a major barrier to growth.

"The FSB has called for the government to promote alternative forms of finance, such as peer-to-peer lending models, and to learn the lessons from other countries were routes to finance are varied, local, longer-term and reliable,"​ said Allen.

He added that more firms needed to be made aware of the support that was available to them when starting up a business or investing in growth.

Young entrepreneurs, for example, were eligible for a grant of £2,000 when starting up their own business, he said. The government has also recently increased the annual investment allowance to £250,000.

‘Forced to seek funding from abroad’​

Dan Wagner, ceo of infrastructure and technology provider for retailers and manufacturers Powa Technologies, warned that if changes weren’t made to the financial support system for SMEs and start-ups more businesses would be forced to seek funding from abroad.

“We have some fantastic, inspirational entrepreneurs who start great businesses, but unfortunately many of them have to go abroad to get the funding they need to grow and succeed and that is a shame.”​

He added that the UK needed to provide the right environment so investors, who have earned their money and paid their taxes, can risk an investment in a speculative start-up behind an entrepreneur they think might succeed.

“If they do this they don't want to see their one successful investment out of the 10 they have made get taxed at 30%. It doesn't seem right," ​he added.

He called on more targeted tax incentives for SMEs and start-ups, including the removal of the capital gains tax. The capital gains tax is a tax on the gains made when someone sells their assets in a company.

£90bn loosening​

Meanwhile, speaking to business leaders at the University of Nottingham last week, the new governor of the Bank of England Mark Carney announced a £90bn loosening of liquidity requirements on banks, in a bid to free up lending to businesses and consumers.

"The Bank of England's task now is to secure the fledgling recovery, to allow it to develop into a period of sustained and robust growth," ​he said.