With the UK’s very first small business commissioner appointed on 3 October, CEO at the National Association of Commercial Finance Brokers (NACFB), Graham Toy, asks three business owners what small firms now need from former Conservative MP Paul Uppal and his new office.
The new small business commissioner needs to help reinforce the availability of finance on offer to small businesses. This would help bring much needed stability to the UK’s SMEs as we attempt to negotiate the choppy waters of Brexit ahead.
There’s an estimated 100,000 small firms being turned down for around £4bn of loans by the main British banks each year, yet only three per cent of those rejected look to find alternative financing options.
Last year, the government’s Bank Referral Scheme aimed to address this shortfall, but early indications show its struggling to make the desired impact. The Bank of England has said that credit is still readily available, despite wider uncertainty in the economy.
SME financing is a tough landscape to navigate and, with the diverse needs of small businesses, there’s no off the shelf solution.
Partner at chartered accountants HW Fisher, Brian Johnson, said: “With proper teeth and access to government ministers, the small business commissioner could, in theory, provide a much more powerful voice for SMEs at the policy table.
“The commissioner could help deal with matters like access to finance, Brexit, bureaucracy and red tape, late payment of debts, encouragement and incentives for entrepreneurs and support accessing overseas markets.
“There is a vast amount of information in disparate places and a good website constructed by the commissioner’s office could provide a road map for small companies to be able to quickly obtain answers to questions, and to be able to access information that would be of practical benefit.
“Without teeth and real influence, the small business commissioner will just become another government supported bureaucrat where the aspiration was laudable but the execution poor. I am not convinced that the commissioner will have the ability to influence the government to ensure the voice of SMEs is heard alongside the clamour of the City and big business.
“In addition, I am not convinced the commissioner will be able to address the economic imbalance between large companies and small firms such that something can be done about the scourge of late payment of debts. It is inimical that small businesses should effectively be funding much larger businesses through involuntary extended debt terms.”
Commenting on Uppal’s appointment, founder of business management tool Grow In Cloud, Jahan Safdar, added: “As a report made clear a couple of weeks ago, small businesses are spending an average of 120 days every year on admin alone.
“This is clearly time-consuming and, ultimately, preventing small businesses from achieving the growth they need.
“The intervention of a small business commissioner could help to redress this weighty admin burden – particularly as small business owners contend with the added headache of the government’s auto enrolment deadline and its Making Tax Digital initiative.
“A clear online guide to what companies need at the start of their journeys would be especially useful. For public-facing businesses, there are a number of aspects that small business owners need to think about – and so many different places they can access this information.
“An authoritative guide from the government would certainly help clarify what small business owners need.
“We welcome Paul Uppal as the UK’s first small business commissioner,” confirmed CEO of late payment technology startup Previse, Paul Christensen.” This appointment recognises the very real problems facing small and medium-sized businesses in the UK.
“Uppal has a crucial task ahead of him. This country’s economy is built on the hard work and innovation of small businesses, yet late payments are strangling economic growth and causing 50,000 business deaths a year by blocking up the payments chain.
“As the UK prepares to leave the EU, it will be even more vital that we eliminate as much friction in the supply chain as possible, ending late payments is a key part of that.
“It’s in the interest of all businesses, buyers, and sellers, that this problem is dealt with. The commissioner’s task will be to help small businesses and multinationals work together.
“He must enable and encourage multinationals to have the tools to tackle late payments and help educate SMEs about the options available to them to improve cash flow.”
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