British Business Bank outlines need for extra finance options for small businesses

In a new report, the British Business Bank has called for more finance options to be available to UK small businesses seeking to grow.

The Bank works to help increase the number of finance providers and finance options available to small firms.

Within its report, the British Business Bank found that ‘core debt products’ such as bank loans, credit cards and overdrafts remain the most frequently used amongst small businesses. However, since 2012 fewer businesses have opted to utilise these core products, the Bank found.

It also revealed that more than 75% of its stock of finance is provided by suppliers other than the four largest banks in the UK.

Keith Morgan, CEO of the British Business Bank, commented: ‘The diverse finance needs of our smaller business community are not always reflected in either the provision or take-up of available finance options, with pronounced differences seen across regions both in the supply and awareness of different finance options.

‘As the UK’s national economic development bank, we were created to improve finance markets so they better serve smaller businesses across the UK, enabling them to fulfil their growth potential.

‘We are committed to finding ways to support the market in increasing choice of both supplier and product, as well as raising small business awareness of the range of finance options available.’

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Interest rates rise would be ‘good news’, Bank of England Chief Economist states

Andy Haldane, Chief Economist at the Bank of England (BoE) has stated that a rise in interest rates would be ‘good news’, as it would serve as a sign that the UK economy is ‘healing’.

The base interest rate currently stands at 0.25%. Interest rates could be raised over the coming months, and the BoE has indicated that they could rise as soon as November.

Mr Haldane commented: ‘In the September minutes in particular, a majority of the committee – of which I am one – said that we could be nearing the point where a reduction in some degree of monetary stimulus might be warranted in the coming months.

‘And let’s be clear here: for me that would be a good news story. This would be interest rates getting back to normal, even if the new normal is different to the old normal.

‘This would be a sign of the economy healing, and therefore adjusting to that healing process.’

However, economists believe that an increase in interest rates could potentially harm the economy. Weak economic readings and uncertainty generated by Brexit will hamper growth, experts have predicted.

Gender pay gap for female managers has ‘widened’, research reveals

Research carried out by the Chartered Management Institute (CMI) has revealed that the gender pay gap for female managers in the UK has ‘widened’.

The data, which was collected by surveying more than 118,000 employees across 423 UK organisations, suggested that female managers now earn almost £12,000 less per year than male managers.

The gender pay gap currently stands at 26.8% for individuals in managerial positions – a rise when compared to 2016’s pay gap of 23.1%.

Under new government rules, from 5 April 2017 businesses with more than 250 employees are required to publish their gender pay gap figures. Firms have until April 2018 to do so.

However, so far only 77 of the 7,850 affected employers have published their pay gap data, the CMI found.

Commenting on the issue, Ann Francke, Chief Executive of the CMI, said: ‘Our data shows we need the government’s gender pay gap reporting regulations more than ever before. Yet, less than 1% of companies have reported so far.

‘Time for more companies to step up and put plans in place to fix this issue. It’s essential if UK companies are to survive and thrive in the post-Brexit world.’

Nearly half of SMEs ‘unaware of new data protection rules’

Businesses are being urged to prepare for landmark new data protection regulations after a study revealed that almost half of firms are unaware of the changes.

A survey carried out by specialist lender Aldermore found that some 46% of SMEs questioned had not heard of the new General Data Protection Regulation (GDPR), despite substantial penalties for businesses that do not comply.

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Just 9% of respondents said they fully understand the implications of the legislation, which comes into effect on 25 May 2018.

Under the new rules, organisations which collect, store and process individuals’ personal information will be subject to new obligations, with an increased emphasis on accountability and transparency.

The legislation covers a number of areas including: condition for consent; the right for customers to access data; the right for customers to be forgotten; and the right to rectification and objection to profiling.

Commenting on the findings, Aldermore’s business finance group managing director, Carl D’Ammassa, said: ‘The GDPR is the biggest shake-up in data protection to date and the results are worrying when looking at the amount of businesses that are unaware of the impact it will have on them.

‘Data privacy, the appropriate use of customer information and breach notifications all need to be taken incredibly seriously. This is made especially apparent when one considers the increased sanctions businesses face if they don’t keep to the new regulations’.

Further information on the GDPR can be found on the ICO website – ico.org.uk.

Data reveals confidence amongst UK small businesses has ‘plummeted’

Confidence amongst UK small firms has fallen to its lowest level since the aftermath of the EU referendum, data published by the Federation of Small Businesses (FSB) has revealed.

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According to the FSB’s latest Small Business Index (SBI), confidence fell to +1 during the third quarter of 2017, down from +15 in the second quarter.

63% of small firms identified the domestic economy as being a ‘barrier to growth’, whilst 35% highlighted consumer demand as being an obstacle to growth.

The SBI also revealed that 13% of small firms now expect to either downsize, hand on or close their business. Meanwhile, 70% of businesses have reported an increase in operating costs: labour, taxation and rent have all been cited as having contributed to this rise.

Mike Cherry, National Chairman of the FSB, commented: ‘Rising inflationary pressure and a weakening domestic economy are the twin drivers of plummeting confidence among small firms and consumers alike.

‘With conference season and the Autumn Budget approaching, policymakers have an opportunity to restore optimism.

‘Small firms will be looking to the Chancellor to extend a lifeline at the Budget. In such a difficult trading environment, any new tax grabs or loss of relief for entrepreneurs would exacerbate existing challenges.’

FSB launches campaign to ‘address health and wellbeing’ of UK small businesses

The Federation of Small Businesses (FSB) has launched a new campaign which aims to ‘promote the benefits of a positive approach to wellbeing’ amongst small businesses in the UK.

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The business group has launched the campaign in the wake of a ‘rise in the number of cases of health and mental health problems’ across the UK’s workforce.

Currently, the UK’s annual bill for sickness absence stands at £29 billion, the FSB found.

In addition, research carried out by the FSB’s medical and health advice service revealed that the number of small businesses seeking mental health advice has doubled over the last five years.

In conjunction with Public Health England and the mental health charity, Mind, the FSB has published a guide to wellbeing for small businesses. The guide aims to supply small business owners with strategies for managing stress in the workplace and dealing with loneliness. It also provides advice on how to initiate conversations about mental health and wellbeing.

Commenting on the issue, Mike Cherry, National Chairman of the FSB, stated: ‘Owning and running a business can be hugely rewarding. However, it brings with it demands, responsibilities and risks that can bring personal pressures that can impact a person’s health and wellbeing.

‘Small business owners can play a vital role in improving the lives of their employees through a variety of actions – from innovative and new ideas to simple steps such as encouraging more activity and regular breaks.’

Businesses urge government to make ‘urgent progress’ during upcoming Brexit talks

More than 100 UK businesses have signed a letter to the Brexit Secretary, David Davis, urging him to ensure that ‘urgent progress’ is made in the next round of Brexit talks.

The letter calls for Mr Davis to make sure that transitional arrangements are secured.

Signatories of the letter represent ‘businesses of all sizes, sectors and regions of the UK’, and have responsibility for over 500,000 jobs in the UK and 600,000 jobs in the EU.

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In the letter, the businesses state that they need to make investment and employment decisions now that will have consequences for economic growth and jobs in the future.

The businesses affirm that, until transitional arrangements can be agreed upon, the risk of the government failing to secure a Brexit deal ‘remains real’. The firms therefore want ‘substantive progress’ to be made in the upcoming negotiations.

Commenting on the issue, Carolyn Fairbairn, Director General of the Confederation of British Industry (CBI), said: ‘Businesses are deeply concerned about Brexit and getting more so by the day. Not about the fact that Britain’s exit from the EU is happening – they’re fully committed to making it work. The concern is how we do it.

‘The top priority is to open talks on a ‘status quo’ transition for business, lasting two to three years. That will clear a path to discussing the main prize: trade between the UK and the rest of the EU.’

The letter can be read in full here.