Nineteen per cent of businesses are more inclined to invest in their business now that there is greater clarity on the UK Government’s economic roadmap finds Simply Asset Finance, the asset finance provider for businesses. However, smaller firms are not so optimistic about the future.
The research revealed that in the past year, firms have been battling with changes to national insurance and the minimum wage. Nonetheless, following the October Budget, firms have felt better about the future as they prepare to implement the required tax changes. However, smaller businesses have a bleaker outlook than medium-sized ones as Simply Asset Finance breaks down the impact of Chancellor Reeves’ interventions.
Fifty-three per cent of businesses questioned believe the recently announced reduction in business rates for retail, hospitality, and leisure will enable growth. Specifically for medium-sized businesses, 55 per cent saw the business rate reduction as a growth opportunity, while 48 per cent believed the fuel duty freeze would support their expansion.
Furthermore, looking at investment in infrastructure, 46 per cent of medium-sized firms expect transport spending to boost growth, with 43 per cent viewing energy infrastructure improvements as essential. With these resources at their disposal, medium-sized businesses could be poised to leverage these policies for sustained success in the year ahead.
Mike Randall, CEO, Simply Asset Finance said: “The initiatives introduced in the recent budget are a silver lining for medium-sized businesses, with many of the measures evidently enabling them to pursue growth with renewed confidence providing the resources and stability needed for innovation and expansion. However, there is a pressing need to extend similar support to micro-businesses, as they continue to bear the brunt of unique challenges and uncertainties that threaten their ability to thrive.
The smaller the business, the bleaker the outlook
Over half of micro-businesses (53 per cent) believe rising national insurance contributions will hinder their growth. This is more than the responses given by 46 per cent of small businesses and 40 per cent of medium-sized businesses.
Similarly, 46 per cent fear the impact of potential capital gains tax increases, a concern less pronounced among small (40 per cent) and medium-sized (38 per cent) firms. Adding to this, micro-businesses face the highest levels of uncertainty, with seven per cent unsure about their future—far higher than the two per cent of small businesses and one per cent of medium-sized businesses.
Randall added: “The reality is that there’s no ‘one-size fits all’ policy for SMEs – nor for their financing either. Policymakers, lenders, and industry leaders must work together to provide the necessary support to help businesses of all sizes thrive, creating a more balanced and resilient future for the UK economy.
“For finance providers, it’s about flexibility and trust. Whether it’s by offering debt restructuring, showing pathways to investment, or exploring ways to help businesses manage through seasonal fluctuations, there are concrete steps that can be taken to support SMEs and help them grow despite the current uncertainties. Only by leveraging the resilience and entrepreneurial spirit of UK businesses, can we unlock the potential of businesses of all sizes, broadening support and fostering a balanced and thriving economy.”