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Osborne’s best-kept secret: help for SMEs

Eye-catching initiatives to help small and medium sized businesses;  budgets bristling with enterprise measures; help ‘packages’ announced at party conferences: but many SMEs just don’t see any difference on the ground…

A study out this week suggests that the government is failing to communicate its enterprise-boosting measures after the initial razzamatazz of the PR launch and the photo opportunity.

A study of more than 500 UK SMEs and micro SME suggests that many are unaware of the initiatives in place ostensibly designed to help them.

  • The research, carried out  after the March 2013 budget, revealed that a quarter of small business owners were unaware of the reduction in the rate of corporation tax and of those that said they were, only 13 per cent could state the correct rate.
  •  Nearly half of all business owners were unaware of the ongoing government initiative to reduce red tape for small businesses and only five per cent knew for sure they were in an enterprise zone with around a third having never even heard of enterprise zones.
  •  One in four was unaware of the scheme to roll out superfast broadband connections across the UK and 17 per cent had no knowledge of apprenticeship schemes.

And for those that are aware of these initiatives, they are far from sure that they are working for them.

Just seven per cent believe that there has in reality been a reduction in red tape with an even smaller four per cent saying it has saved them any money.  Just two per cent 2% believe they have seen any benefit as a result of being in an Enterprise Zone.

When it came to finances, while being able to secure lending and/or funding ranked as the number two concern (after fuel costs) for small business owners, many were unaware of the funding options that may be available to them.

The study, by AXA Business Insurance, revealed that half (49 per cent ) had not heard of the funding for lending scheme, 53 per cent were unaware of plans for a Business Bank while 71 per cent had not heard of crowdsource or crowd funding.

Of those that were aware of the funding for lending scheme, just five per cent believed that it was working for small businesses. And only nine per cent were very confident that the new Business Bank would lend to small business owners.

Darrell Sansom, Managing Director of AXA Business Insurance said, “The numbers of small businesses in the UK continue to climb rapidly but it seems that many could be missing opportunities to help their business along the way through a lack of awareness of the support that may be available to them.

“We are also concerned that among those that are more aware, many are not seeing the benefit that they would want”.

‘Low awareness’ of P2P lending for SMEs 

Meanwhile, a separate survey reveals that low awareness may be holding up the spread of peer-to-peer lending.

One in four small to medium sized firms fear they will struggle for finance over the next 12 months, and 16 per cent say they  would consider applying for a peer-to-peer lending scheme (“P2P”) loan over the next year.

Peer-to-peer lending - also known as person-to-person lending, peer-to-peer investing and social lending - is the practice of lending money to businesses or individuals online.  The sector is set to boom with as much as £12 billion to be lent through SME P2P schemes annually, roughly a tenth of total mainstream SME bank lending in 2012.

As many as 26 per cent of  people in the UK  would consider loaning money to UK SMEs by joining a P2P scheme next year when the sector will be fully regulated by the Financial Conduct Authority. And 17 per cent say they would consider lending over the next 12 months.

This is according to a new study by rebuildingsociety, a peer-to-business lending website that connects SME borrowers with lenders looking for better returns than those offered by savings accounts.

The study suggests the biggest obstacle to the growth of P2P lending is low awareness with six in ten (59 per cent) consumers not understanding what the term meant. More than half (54 per cent highlighted a lack of knowledge as the principal reason as to why they wouldn’t invest in a P2P scheme, followed by the fear of borrowers not repaying the loan (46%).

To date rebuildingsociety has advanced £340,000 of cash generated through private individuals to UK businesses and plans to reach £1m by the end of July 2013.

For more information on how rebuildingsociety connects individuals and SMEs looking to access finance, visit