Small businesses offered alternative route to finance
Small businesses that have been rejected for finance by banks may be matched with alternative finance providers under a government scheme. The service will see participating banks pass on details of businesses they have rejected to alternative finance platforms. According to figures from the Treasury, 71% of businesses looking for finance only request it from 1 lender. Of the 324,000 SMEs that applied for a loan or overdraft last year, 26% were declined by their bank. 3% of those declined were referred to other sources of help. Keith Morgan, CEO of the British Business Bank, said: “It gives businesses additional opportunities to secure funding, alternative providers access to a bigger market of potential clients, and major banks an extra service to offer their business clients when they cannot themselves provide finance.”
Alternative sources of business finance
While alternative forms of business finance may not be as well-known as the more traditional bank loan or overdraft facilities, there are other options available to small businesses.
Unsecured loans – the lender and business agree on an amount, interest rate and time frame
Asset finance – funding secured against business assets
Invoice finance – the lender effectively purchases a company’s unpaid invoices
Crowdfunding and peer-to-peer lending – online platforms that connect businesses to multiple individual investors or lenders.
Business rate changes from April 2017
Two changes to business rates are due to come into effect from 1 April 2017. Whether the changes will affect your business will depend on its location and size.
Revaluation adjusts the value of business rates to take into consideration changes in the property market. It usually takes place every 5 years although there hasn’t been a revaluation since 2010. All business properties will get a new rateable value and multipliers (or poundage’s in Scotland) will be revised. The government has stressed that this doesn’t necessarily mean that rates will change. The government estimates that three quarters of businesses will either see no change or a reduction. Revaluation only applies in England, Wales and Scotland. No date has been set in Northern Ireland.
Small business rate relief
Small business rate relief in England will be permanently doubled from 50% to 100% from 1 April 2017. This means that businesses with a rateable value of £12,000 and below will get 100% business rate relief (provided that it only uses 1 property).
Business with a rateable value between £12,000 and £15,000 will get tapered relief.
Pay business rates
Local councils will send businesses a bill for the following tax year in February or March. Firms usually pay in 10 monthly installments.
Get in touch with a member of our team to talk about business rates, accounting specialists on 0800 020 9542.