CBI - Enterprise

The CBI is bringing together key figures in the world of finance for a conference on 22 January 2009. The event will offer a unique opportunity for SMEs and entrepreneurs to come together with financiers to learn how to access finance in a slowing economy and to explore which financial options are most appropriate for their businesses.

Among the confirmed speakers are: Steve Cooper, managing director, Barclays Local Bank; Simon Walker, chief executive, British Venture Capital Association; and Anthony Clarke, chairman, British Business Angels Association.

For more information about the event and to book please visit www.cbi.org.uk/accesstofinance

Small Businesses focus of pre-budget report

The CBI has welcomed the pre-budget report’s focus on supporting SMEs, which also reflected a number of our recommendations on small business corporation tax, income-shifting, tax relief for loss-making businesses, and empty property rates.

On access to finance it was announced that:

The government will launch a Small Business Finance Scheme, a temporary guarantee scheme to enable up to г1bn of new government support lending by banks. Under this scheme small businesses will be able to borrow between г1,000 and г1m from early 2009

The Export Credits Guarantee Department, in conjunction with the banks, will introduce a temporary guarantee scheme to support a г1bn facility providing smaller exporters with better access to short-term working capital. Also, the Fixed Rate Export Finance Scheme will continue for another year after the end of 2008

The government will also make available a capital fund of г50m, providing equity or quasi-equity to SMEs who are overleveraged. This will be funded from the existing Mezzanine Fund, Enterprise Capital Funds and a г10m RDA contribution

Earlier in November 2008, Advantage West Midlands launched a transition loan fund for viable SMEs facing financial difficulties. Other RDAs will launch similar loan funds, now totalling г25m, to help businesses over the next six months

Early in 2009, the government will launch, with Business Link, a new easily accessible portal, to direct credit-worthy SMEs who are experiencing problems accessing credit to the scheme appropriate for them.

Other measures announced to support businesses include:

The modification of a number of planned tax reforms, including the deferral of the increase in the small companies' rate of corporation tax, a temporary increase in the threshold at which an empty property becomes liable for business rates to г15,000, and the reform of air passenger duty rather than proceeding with a per-plane tax

Another deferral of the income-shifting legislation

A new HMRC Business Payment Support Service to allow businesses in temporary financial difficulty to pay their HMRC tax bills on a timetable they can afford

More generous tax relief for businesses now making losses, by allowing temporary additional carry-back of up to г50,000 of losses to be set against taxable profits from the last three years

Subject to the approval of the European Commission, the government has proposed a number of changes to the operation of the Enterprise Investment Scheme, including simplification of the rules concerning the expenditure of money.

The CBI’s letter to the Chancellor in advance of the pre-budget report can be found here.
All of the pre-budget report documents can be found on the Treasury website.

Contact Jo Hensher at jo.hensher@cbi.org.uk

Manage your cashflow

A series of guides designed to help businesses manage cashflow during these difficult economic times has just been published by the Institute of Credit Management in partnership with BERR and supported by the CBI.
The guides are designed to help business in a number of areas essential for effective cashflow management.

The guides cover areas such as: knowing your customer, payment terms, what to do when cash runs short, credit insurance, invoicing and factoring and financing options.They are designed to provide straightforward and speedy advice with simple checklists and top tips. The guides can be found here.

Job losses hit small firms

The CBI’s quarterly SME trends survey shows small firms are now cutting jobs for the first time in over a year as the economic downturn spreads to all sectors.

Both domestic and export orders contracted at a faster rate than was expected in July with this trend expected to intensify.

Output also fell sharply as firms look to scale back operations in the face of the deteriorating economic climate and with firms battening down the hatches business optimism fell at the fastest rate since October 2001.Credit conditions are also tightening but input price growth is now weakening as falling commodity prices reflect weaker demand. Contact Dan Morgan at dan.morgan@cbi.org.uk

SMEs and public procurement

A report from the CBI, the Federation of Small Businesses and the British Private Equity & Venture Capital Association explores the following:

How more public procurement could be directed towards SMEs

Developing proposals to help SMEs provide more public goods and services

Encouraging growth of small innovative companies through public procurement mechanisms.

On behalf of the three business groups, FreshMinds Research conducted a survey of over 500 SMEs and found that nearly three quarters of SMEs surveyed rarely or never bid for government work. The same proportion believes it is still difficult to find out about government opportunities and that there is a lack of responsiveness and too much formality in the procurement process. Also over half of those surveyed felt the tendering process requires more time and resources than small businesses can afford. These findings were made available to the current Glover review on SMEs and public procurement.

Practical recommendations have been developed aimed at both government and business to increase the chances of SMEs winning public contracts. The case is also made that SMEs offer good value for money by providing a better solution or outcome in many cases and in the economic downturn awarding more government contracts to SMEs would help the economy.

Read the report Evaluating experiences of Government procurment (PDF2.29MB)

Click here to download a pdf (752KB) of the guidelines.

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