Small Businesses Set To Struggle in Twin Speed Economy

• Over half of businesses (53%) expect growth from lower business rates, with 48% supporting the fuel duty freeze and 46% backing infrastructure investments.
• 55% of medium-sized businesses see growth opportunities in business rate cuts, while 53% of micro-businesses say rising NI contributions will hinder growth.
• 46% of micro-businesses fear capital gains tax hikes, and 7% remain uncertain about their future—far higher than 1% of medium-sized businesses.
• With only 6% of micro-businesses optimistic about growth, targeted measures are vital to protect the UK’s entrepreneurial ecosystem.

As UK businesses prepare to implement the tax changes announced in the October Budget, new research from Simply Asset Finance reveals a stark divide in business sentiment and their prospects for growth.

Despite grappling with changes to NI and the minimum wage, the survey, carried out in the wake of the budget, shows that almost one in five (19%) businesses are more inclined to invest in their business now that there is greater clarity on the Government’s economic roadmap.  In addition, over half of businesses (53%) questioned believed the recently announced reduction in business rates for retail, hospitality, and leisure will enable growth.

But a closer look at the data shows that smaller businesses and micro businesses are likely to fare much worse than medium-sized companies following Chancellor Reeves’ interventions.

The research reveals that medium-sized businesses are more likely to find that the announced policy changes will bolster their outlook and plans for 2025 than those at the other end of the spectrum. More than half (55%) see the business rate reduction as a growth opportunity, while 48% believe the fuel duty freeze will support their expansion. Infrastructure investments are also seen as key drivers, with 46% expecting transport spending to boost growth, and 43% viewing energy infrastructure improvements as essential. With these resources at their disposal, medium-sized businesses could be poised to leverage these policies for sustained success in the year ahead.

However the mood among smaller businesses, especially micro-businesses, is much bleaker.

Over half of micro-businesses (53%) believe rising national insurance contributions will hinder their growth, compared to 46% of small businesses and 40% of medium-sized businesses. Similarly, nearly half (46%) fear the impact of potential capital gains tax increases, a concern less pronounced among small (40%) and medium-sized (38%) firms. Adding to this, micro-businesses face the highest levels of uncertainty, with 7% unsure about their future—far higher than the 2% of small businesses and 1% of medium-sized businesses.

Mike Randall, CEO, Simply Asset Finance comments: “The initiatives introduced in the recent budget are a silver lining for medium-sized businesses, with many of the measures evidently enabling them to pursue growth with renewed confidence providing the resources and stability needed for innovation and expansion. However, there is a pressing need to extend similar support to micro-businesses, as they continue to bear the brunt of unique challenges and uncertainties that threaten their ability to thrive.

“The reality is that there’s no ‘one-size fits all’ policy for SMEs – nor for their financing either. Policymakers, lenders, and industry leaders must work together to provide the necessary support to help businesses of all sizes thrive, creating a more balanced and resilient future for the UK economy.

“For finance providers, it’s about flexibility and trust. Whether it’s by offering debt restructuring, showing pathways to investment, or exploring ways to help businesses manage through seasonal fluctuations, there are concrete steps that can be taken to support SMEs and help them grow despite the current uncertainties. Only by leveraging the resilience and entrepreneurial spirit of UK businesses, can we unlock the potential of businesses of all sizes, broadening support and fostering a balanced and thriving economy.”

-ENDS- 

Media contact

Teamspirit

simplyassetfinance@teamspirit.co.uk

About Simply Asset Finance

Simply Asset Finance was founded in April 2017 by a team of asset finance specialists, in response to the need for innovation and disruption in the sector. It offers an alternative financial model to banks and looks beyond a balance sheet and credit rating, supported by a digitally enabled customer journey. Simply Asset Finance consider a customer’s potential and work with them to identify and implement the best solution to help them succeed. Their highly experienced sales team is made up of people with extensive knowledge of the industries they lend to. This means they understand the day-to-day challenges that businesses face and the dedicated support teams guide customers through the process, helping them every step of the way.

Simply Asset Finance has lent more than £1.5bn to over 9,000 small and medium businesses across a wide range of sectors including transport, construction, manufacturing, recycling, and agriculture.