Osborne addresses small business funding » SMEInsider

Osborne addresses small business funding

The Autumn Statement encouraged small businesses to hire more apprentices and raise investment through a series of government-backed schemes, but may have reduced the amount of credit banks will allow small businesses.

George Osborne said that employers who hire apprentices under 25 will be exempted from national insurance contributions.

The chancellor also promised £500m for an enterprise finance guarantee scheme backing lending to small businesses, as well as £400m for enterprise capital funds. The British Business Bank, created by business secretary Vince Cable, is backing both these schemes.

Osborne also committed to making traditional funding measures easier for small businesses by extending the Bank of England’s funding for lending scheme for another year, which cuts the cost of borrowing for banks, intending them to pass the price cuts on.

After several years in which the amount of peer-to-peer lenders grew rapidly, the practice is being encouraged by a change in the tax regime. Alongside a scheme to boost small business exports, the research and development tax credit was also increased.

But changes to the way banks are able to use losses stored up from the 2008 crisis to offset their tax bills could actually reduce the amount of credit allowed to small businesses, The Guardian reported.