Government’s small business initiatives branded ineffective

UK Government schemes designed to boost small and medium-sized enterprises (SMEs) have been largely criticised by business owners, with many unaware of the financial help available.

90% of those questioned by accountancy firm Shelley Stock Hutter believe the recent Seed Enterprise Investment Scheme and the National Insurance Holiday programmes have not been of any help to their business.

This is partly due to a lack of awareness surrounding the financial benefits of the initiatives. Just 24% of respondents understand the government’s Enterprise Finance Guarantee Scheme, and only one in ten have any knowledge at all of the National Insurance Holiday.

31% of SMEs plan to use bank loans or overdrafts to finance their business in 2013, according to the report. Around one in 10 will target private equity firms or business angels, and a similar number will implement invoice discounting or factoring.

The research highlights that many companies, including spas and salons, need more detailed information on the financial assistance available, with Bobby Lane, a partner at Shelley Stock Hutter, noting that the schemes could mean the difference between survival and growth: “There have been a number of initiatives introduced for small businesses, but little supporting information or an education campaign to follow this up.

“As a result, many small businesses are at sea as to how their business will gain and what steps have to be taken to benefit from the schemes. The answer is not to saturate the SME marketplace with more initiatives, but to make a concerted effort to provide more detailed information on existing schemes, the best way to access them, along with the most appropriate way to finance their business.”

For further information on the government schemes, click here.