Autumn statement looms large for SME finance

Core Insights - The resilience of SMEs is attributed to their experience in navigating a challenging environment over the past 10-15 years, influenced by austerity measures, referendums, Covid, and inflationary pressures [1] Group 1: Current Economic Climate for SMEs - The Small Business Index from the Federation of Small Businesses (FSB) has dropped to -58 points in Q3 2025 from -44 in Q2, indicating a deteriorating sentiment among SMEs [2] - Despite the negative index, many SMEs remain optimistic about their growth prospects, although they are delaying investment decisions due to higher costs and economic uncertainty [2] - A survey by Simply Asset Finance reveals that 42% of SMEs want the government to prioritize tax and costs in the upcoming Budget, with other concerns including business tax reform (36%), business rates (35%), and access to finance (26%) [3] Group 2: Government Budget Expectations - SMEs are anticipating targeted protections in the forthcoming Budget, particularly regarding business rates and employment allowances [5] - The small business sector is preparing for Rachel Reeves' Autumn Budget statement on November 26th, with a focus on addressing the challenges faced by SMEs [6] Group 3: Challenges Faced by SMEs - A survey of 1,000 SME lenders indicates that small businesses are impacted by rising employer NICs (73%), corporation tax (69%), national minimum wage (64%), and capital gains tax (59%) effective from April 2025 [4] - SMEs are facing significant pressures from evolving employment legislation and rising operational costs, which demand considerable time and resources [7] Group 4: Financing and Support for SMEs - Time Finance successfully structured a £1.6 million asset-based lending solution for a furniture manufacturer facing insolvency, highlighting the importance of well-structured business finance [8] - 37% of firms surveyed by Bibby Financial Services want the government to cut business rates, and a quarter seek a reversal of the employer NIC rise [9] - SMEs are also seeking clearer measures to support international trade and targeted help to offset international tariffs, particularly on exports to the US [10] Group 5: Government's Role and Expectations - Lenders are seen as crucial in providing flexible funding to support SME growth, while the government is urged to ensure a competitive lending environment [11] - SMEs desire clarity from the government regarding future employment costs and do not expect reversals of recent tax increases [11][12] - The government is encouraged to address the persistent issue of late payments, which severely constrains cash flow and growth for many SMEs [12][13] - There is a call for the government to back the British Business Bank's efforts and to provide a business-friendly budget to instill confidence in SMEs [14][15]