What should have been a couple of weeks of optimism and excitement turned into a damp squib, led by the speeches at the Labour Conference in Brighton. One that left business leaders who attended with more questions than answers.

Despite the Prime Minister and Chancellor’s pledges for growth and productivity, we have seen precious little substance on this to give SME leaders cheer. I believe if 10% of SMEs are helped to grow, this could be worth 3% to the UK’s overall economic growth. So it’s definitely time the government took small firms seriously.

But, there must be some cheer in the air as we enter the countdown to the Chancellor’s Budget on 30 October. Surely this will be filled with giveaways and a helping hand for small businesses, especially as many think ahead and prepare strategies and finances for 2025.

So, what do we need from the Chancellor at the end of the month?

Bye bye late payments

A crack down on late payments sooner rather than later please. Introduce a more understanding tax regime to allow businesses to flourish, rather than be dragged down by business rates and other levies before they get a chance to grow and thrive.

Review of the bank referral programme

A review of the success of the bank referral programme, which has not been fit for purpose for years. There is a £22 billion funding gap which, if fixed, could lead to an environment where SMEs are actually encouraged to grow and drive the UK economy.

Since the 2008 financial crisis, the desire from major high street banks to lend to SMEs has fallen through the floor. This has made it more and more difficult for smaller firms to get access to finance, which is often key to being able to expand, invest and increase productivity. Much more so than for larger firms.

The Designated Finance Platform, whereby high street banks that are unable to lend to small businesses provide referrals through a panel of brokers to other lenders, was set up to facilitate lending to these businesses and better enable growth. It is a prime example of a good idea that has not had the desired effect. Less than a quarter of businesses rejected by banks for loans are referred and even fewer are successful.

While some of this can be attributed to problems on the supply side (it is not easy for some alternative finance platforms and smaller lenders to deal with the number of leads a high street bank generates) this problem is being solved rapidly with the use of AI and open banking.

Better industry and Government collaboration

Business leaders are being kept up at night by concerns over rising costs, taxes and access to finance. With the new government proposing to close this gap and provide better access to funding, the banking and finance industries, along with business leaders, need to work together to deliver this requirement quickly.

This includes opening access to alternative finance, especially where high street banks and traditional lenders are unable to provide assistance to business leaders in their time of need.

Opening up of alternative lending

Alternative lending has emerged as a game-changer for small and medium-sized businesses offering a range of advantages over traditional bank financing. The benefits are many.

Alternative lenders often have streamlined application processes, allowing for quicker decision-making compared to banks, leading to decisions that can be made within hours.

Once approved, funds are typically released much faster, enabling SMEs to seize opportunities promptly. For example, earlier in the year, we helped a small business access finance in just 19 minutes – the time from application to the business receiving the finance in their account.

Alternative lenders often cater to a broader range of businesses, including those with less-than-perfect credit scores or those operating in industries that traditional banks might avoid, such as retail and hospitality. Less stringent requirements, such as collateral, make it easier for SMEs to qualify for financing.

Alternative lenders offer a variety of loan products and terms to suit different business needs, providing more flexibility than traditional bank loans. Flexible repayment schedules and interest only payments can be negotiated to align with the business's cash flow.

Many alternative lenders offer online platforms, making the application process convenient and accessible. Advanced analytics and data-driven decision-making can lead to faster and more accurate assessments of creditworthiness.

Alternative lenders often have a deeper understanding of the unique challenges and opportunities faced by SMEs.