Chamber responds to Chancellor’s reforms to small business finance

Richard Blackmore from The East Midlands Chamber

A new package of measures announced to expand small business finance has been cautiously welcomed by East Midlands Chamber.

Measures announced include:

• Growth Guarantee Scheme – expansion to facilitate an additional £2bn of SME lending per year by 2028/29, more than doubling the current annual lending supported by the scheme to around £3.35bn
• Broader eligibility and longer loan terms – maximum loan term extended from six to 10 years for loans up to £1.1m, and the eligible turnover threshold raised from £45m to £54m
• Extra reach – the British Business Bank estimates these changes could support an additional 12,000 businesses per year by 2028/29
• ENABLE Guarantee – £500m allocated to support IP-rich and innovative SMEs and scale-ups that struggle to access finance against physical assets
• Community and export finance – measures to strengthen Community Development Finance Institutions through the Community Finance Taskforce and Community ENABLE Funding, plus a new portfolio guarantee scheme to boost export finance for smaller firms from spring next year
• Wider ecosystem support – further activity to improve financial readiness, develop Open Finance for SME lending, remove legislative barriers to building societies lending to SMEs, and reforms following the ring-fencing review

East Midlands Chamber Director of Policy and Insight Richard Blackmore said: “Improving access to finance is a vital step for businesses across the East Midlands. Greater availability of guaranteed lending and targeted support for innovation and community lenders should help more local firms invest, scale and export. The Chamber will work with banks, CDFIs and partners to connect businesses to these opportunities, support members to understand new terms and eligibility, and champion the region’s firms so local ambition is matched by finance.

“Going forward, we will monitor the implementation of this finance, while looking at national guidance, so our members get clear, timely information; we’ll support members to assess finance readiness and identify appropriate lenders or programmes and collaborate with partners to develop practical events, briefings and online guidance that help firms take advantage of the changes.”