April 19, 2012
Filed under: Business Finance,Business Tools,General — Alan @ 5:19 pm
The government have recently established a fund worth nearly £200 million in order to help small companies and academic institutions deal with some of the healthcare problems being faced by the country.
The money is being put towards something called the Biomedical Catalyst which was launched by David Cameron last December. The money is going to go towards helping to fund medical technologies that have been developed and help them become commercially successful.
The fund is going to be open to academics and small businesses and it is expected that it is going to have a positive impact on the economy as well as the state of healthcare in the country. Many innovative technologies are expected to be developed in the industry and the best of them are going to be encouraged and developed into commercially viable products.
The government has stated that they are committed to developing these medically beneficial products and that they understand the bright future that can be developed from the laboratory. They understand the value of investments in new developments such as drugs, and it is expected that this money is going to help bridge the gap between development science and patients who can benefit from these medical treatments.
There are three different types of grant that are going to be made available and it is going to be easy for academics, businesses, or a combination of both to apply from them. The maximum award size that can be given out to one institution is going to be £3 million and this is largely going to be targeted towards those who have begun to develop the drug, and have gone beyond the feasibility study stage.
The money is going to be particularly awarded to those companies who are dealing with specific healthcare problems seen in the country
April 11, 2012
Filed under: Business Finance,Small business,Small Business News — Alan @ 7:02 pm
With all the emphasis on the importance of small and medium-sized businesses in the UK’s economic recovery and growth, the problem of financing for those SMEs has been a subject of much controversy and indignation. SME owners complain that bank financing is too expensive and too restricted; banks are leery of lending money to start-ups and business entrepreneurs.
A relatively new source of funds is beginning to look as if it may take the place of banks, at least for some SMEs. It’s known as peer-to-peer or social lending, or P2P. It started a few years ago as a way for small investors to loan spare cash directly to another private party, usually a friend or associate. The idea was to cut out the fees and paperwork involved with banks and brokers, and make the transaction easier and more profitable for both parties.
The idea took hold in a big way, and by now even the government is getting behind it. In his last budget statement UK Chancellor George Osborne earmarked £100 million in government funds for P2P and other non-traditional lending sources, as part of his ongoing efforts to make more funds available to SMEs.
However, that’s just a drop in the bucket of what’s needed, and FSB (Federation of Small Businesses) says only a small fraction of its members are even aware of the P2P opportunities. Currently, total SME loans through peer-to-peer channels only amount to between £100m to £200m a year.
With the P2P setup, ideally a lender/individual can get a better return than by putting the money into savings, and generally in a much shorter time. The borrower gets faster, easier access to funds at less cost than with traditional lenders (banks). The first P2P company to have an established presence in the UK was Zopa, created in 2005, but at present there are five well established groups and more on the way.
April 10, 2012
Filed under: Business Advice,Business Finance,General,Small business,Small Business News — Alan @ 6:59 pm
SMEs in the UK seem to be in a beleaguered situation, what with the government counting on them to restore the economy to the fast track but with many a small business owner unable to get the funds needed to start up or grow a business. It’s a long and rocky road to success for the great majority of new, small business, but here’s something that may smooth the way, at least in one sense.
Starting in April, Jaguar will be purring at the doorsteps of SMEs with vehicles and leasing programs specially designed for the SME market (which may suddenly have a growth spurt as this program unfolds).
Jaguar’s UK sales director, David Lewis, handles retail and corporate sales, and he says the company has focused too much on private sales. He has instigated a re-training program to educate all of Jaguar’s 90 dealers in the fine points of the SME market and its requirements.
Lewis says that it’s not that businessmen don’t shop for Jaguars, it’s that the company has heretofore dealt with them on a corporate basis. He says the new approach will be more personal and appeal to the typical SME owner, who is almost by definition an entrepreneur and an individualist.
One thing SMEs may be looking for is an attractive leasing package; there is little doubt that the vehicle would clinch the deal if it’s one of Jaguar’s new line of ‘business models’. That’s what Jaguar will be presenting; two new Jaguars based on the XF 2.2 diesel – the XF SE Business model and the XF Sports model.
Mr. Lewis says the latest indication is that the higher powered Sport version is sweeping the field as far as SME owners are concerned – even though it doesn’t lead the field in CO2 emission tax breaks.
April 4, 2012
Filed under: Business Advice,Business Finance,General,Small business,Small Business News — Alan @ 11:02 am
Small businesses in the UK will get a helping hand from the acquisition of Singers Asset Finance by a relatively new lending institution, Shawbrook Bank, which completed the transaction on 22 March.
Shawbrook was created in 2011 as a specialist savings and lending bank committed to increasing the volume of loans made to small and medium businesses.
Chaired by former RBS head Sir George Matthewson, Shawbrook joins the small but hopefully growing ranks of UK banks such as Aldermore and Metro Bank, launched since the beginning of the credit crisis whose stated aim is to make it easier for ‘young’ businesses to get a solid foothold in an economy just now emerging from recession.
These new enterprises offer options that they hope will challenge the country’s lending giants, banks the government has repeatedly taken to task for their hesitancy in loaning money to SMEs. Owen Woodley, Shawbrook’s chief executive, is confident that the merger with Singer will give his company the means to increase its client base and lending capacity, and to provide more timely service than the big banks have been seen to offer.
Woodley told Reuters news agency that the deal would add £350 million to its loan book, bringing it up to around £500 million, and he expects that figure to reach £700 million by the end of 2012, with a combined client base of at least 25,000.
Shawbrook, Woodley added, will be opting out of George Osborne’s new credit easing plan meant to make it easier for SMEs to borrow money from the big banks. He feels the scheme will not be advantageous to banks like Shawbrook that raise most of their funds from retail deposits as opposed to wholesale financial markets.
Singer and Shawbrook respectively are oriented towards financial solutions for small business, and combining their resources and expertise should benefit both of them, as well as their growing clientele.
March 13, 2012
Filed under: Business Finance — Alan @ 10:45 am
A Government has three clear option is they end up being unable to deliver a policy; they can come clean, hope nobody notices, or change their definition of the policy.
It would seem that the latter has been applied to the policy which dealt with private sector procurement supporting SMEs, small to medium enterprises.
Government documents are arguing that SMEs are key to future economic growth, and the public procurement from SMEs should be increasing with them. For this, they have set a target of 25%.
However, the redefinition of what has effectively been downgraded to an aspiration from a policy means that instead of the SMEs directly receiving the original 25% of the value of the central government procurement, all business being done with SMEs, including those in the supply chains, will now be included in this percentage.
This is going to make a huge difference as supply chains are renowned for being complex, and can include a vast number of different organisations. Should you analyse most supply chains it will not be long before you find first one SME, and then many more, involved in the process.
Within some supply chains, business with SMEs can actually exceed the total cost of the end product for the procuring organisation. As the government has now included indirect business with SMEs, they have guaranteed success, and if they had also used this definition, every previous government would have also succeeded.
This change in the policy matters to both the SMEs and the economy of the UK. Those that are in the supply chain often find that their margins are squeezed by the government’ main contractors, thus inhibiting their growth, and affecting their ability to both invest and create jobs. If you also try to measure the value of the business with SMEs in the supply chain, it is very difficult and also open to manipulation.
People are wondering if it would be totally unreasonable to suggest that some departments in the government will now be tempted to spend with SMEs more through measurement than due to any change in practice.
March 12, 2012
Filed under: Business Finance — Alan @ 10:46 am
The average SME in the UK is set to waste £1589 during 2012 in unnecessary tax payments.
The biggest area for tax waste is where SMEs don’t incorporate their business, which accounts for a total of £4.2bn of tax wastage. With the prospect of a double dip recession looming, UK SMEs are preparing to battle increasingly tough trading conditions.
Despite this, it has been revealed in new research from unbiased.co.uk’s ‘Small Business Tax Action Report’ that SMEs are set this year to waste an enormous £7.15bn in unnecessary tax payments in 2012. This equates to average of just over £1500 for every one of the 4.5m SMEs that there are in the UK.
The annual Tax Action Report from unbiased.co.uk takes a look at the average amount of tax that we, as a nation, waste. This years edition, for the first time, includes a specific section that looks at the key areas of tax wastage among SMEs. The report examines the savings that SMEs could make simply by using their array of allowances better, as well as the tax credits and the tax efficient business support schemes that are also at their disposal.
The report also reveals that the no. 1 area for tax waste for SMEs is incorporation, which alone stands at over £4.2bn, followed by the failure to use self employed contractors, £2.05bn, and utilising their development and research relief, £373m.
The most significant of the SMEs tax wastage is being accumulated by partnerships and sole traders through the failure to incorporate their business by not turning it into a limited company or a limited liability partnership.
Currently, around 1.3m UK businesses could benefit from different savings on NI contributions and income tax breaks, all they have to do is change their legal status. The second highest area for tax wastage could also be addressed by companies if they made more use of self employed contractors.
Although there is some evidence of the so called disguised employees, who leave a company to become self employed yet continue to work practically full time for the same company, this is an illegal practice and should not be considered as an option by an SME, unless they are prepared for the consequences.
March 7, 2012
Filed under: Business Finance — Alan @ 3:20 pm
Small businesses are struggling to find finance with traditional lenders and this is causing a problem for economic growth in the UK.
The FSB have recently issued a statement saying that the government should look abroad for finding other ways to finance small businesses in the UK.
There are numerous other types of lending models that can be adopted by small companies looking for finance.
The FSB issued a report which showed how some methods of funding adopted in countries, such as Germany and the United States, could work with small businesses in the UK. The report examined things such as peer-to-peer lending.
In the three years after the beginning of the financial crisis in 2007, the amount of applications made for lending by small firms in the UK fell by nearly 25 percent. This was significantly less than the drops in other countries, for example, Germany saw just a 10 percent drop.
In the United States, the figures were closer to Germany than they were to the UK. The US also has the advantage that the government will guarantee loans that are made to small companies.
The FSB also said that the government should consider opening an investing account, which would encourage peer-to-peer lending. The overall tone of the report was that if the variety of credit options do not improve then credit is not really going to become more available in the near future.
Ted Salmon is a regional chairman of the FSB and he commented, “When you compare our bank loan system to other countries, such as the United States or Germany, you can see how we simply fail to deliver to small businesses.
There are particular regions of the country where this failure is particularly evident, for example the North East. The government is spending too much time trying to fix the current methods of lending, instead of doing what they should be doing, exploring new methods of financing.”
The report is more than just a criticism of the lack of current lending options, and it offers a great many alternatives that could work in the UK and help create a financial system for small businesses that would rival that seen for larger institutions.
February 21, 2012
Filed under: Business Finance — Alan @ 7:19 pm
Many small and medium-sized enterprises in the UK are suffering from cash flow crises because of their failure to collect on invoices that are still outstanding.
The number of companies going bankrupt in the UK is increasing and debts held by these companies are going up.
This is despite the fact that financing is hard to come by and this is not helped by the fact that many people are being slow to pay their bills. A recent survey has highlighted that unpaid bills are causing an enormous problem for many small companies in Britain.
300 lawyers specialising in debt recovery for small and medium-sized companies have recently been surveyed. Nearly 95 percent of them said that the number of owners seeking legal advice about invoices that have not been paid is significantly increasing. Around 30 percent of them have said that this part of their businesses increased by around 50 percent.
This news is not so surprising, considering the state of the economy. Many small businesses are finding that they don’t have a great deal of cash and that it is difficult to borrow money from banks. In addition to this, the small businesses are reluctant to take money from banks and often want to tap into other sources of finance. All of this leads to a significant problem when it comes to the company’s cash flow account.
The survey highlighted that the average amount people are seeking to recover is somewhere between £5000 and £10,000. Around 20 percent of the debts are worth over £10,000. Size is not the only important factor here and the number of debts that are outstanding is also increasing. This is resulting in more legal action is being taken against people failing to pay.
Unfortunately, even after a court judgement is made against someone, the recovery process can still take a long time. This can increase the risk of a company become insolvent by further aggravating the cash flow problem that the company is having.
The survey highlighted that in some cases it can take over six months for money that has been ordered to be paid by a court to actually be settled. The average time between judgment and the company receiving the money is about four months.
Contact Law commissioned the survey and the director of it was Dan Watkins, and he said, “It’s hardly surprising to see that debt recovery lawyers are getting more business. The country is going through a significant recession and it is becoming increasingly challenging for smaller companies to stay in business.
Late payments are not helping the situation and many companies are looking to recover the debts as quickly as possible.” The findings by the survey have been reinforced by a similar survey from the FSB which has further highlighted the cash flow problems that some businesses are facing.
February 9, 2012
Filed under: Business Finance — Alan @ 10:32 pm
- 13% of small business invoices remain unpaid each year
- 39% of invoices fail to be paid on time
- 76% of the 25 employee hours per week spent chasing invoices could be saved with e-invoicing
Research carried out by Tradeshift has found that 13% of invoices that are issued by small businesses in the UK every year remain unpaid, resulting in a £1.4tr black hole in the economy. Times are particularly tough for small businesses at the minute and 30%, just under a third, have said that the cash flow problems caused by the unpaid invoices could well cause them to lay off staff, whilst 20% said they would have to take out a business loan or turn away business.
The responses that owners of small businesses and financial decision makers made in the Tradeshift survey are revealed in a new report called “Getting Paid”, which is now available to download at shiftbusiness.net/getting-paid. It found that,on average, small businesses issue 528 invoices every year and 69 of these remain unpaid, totalling 177m invoices.
In addition to these unpaid invoices and, despite the majority of small businesses having payment terms of less than 60 days, 39% of all invoices issued are not paid on time. When asked about the reasons for non-payment of invoices, 34% put slow payers at the top of the list, followed by companies going out of business (24%), disputes over work (19%), cash flow (11%) and administration (9%).
The resulting administrative burden of chasing these payments requires an average of 25 employee hours per week spent managing, processing and chasing invoices. Small business owners estimate that 76% of this time could be saved if all invoices were managed online, but only 28% said they currently handle invoices in this way. This burden is magnified by the fact that over a third of invoices are still received by post.
Mikkel Hippe Brun, Co-founder and Chief Strategy Officer at Tradeshift, an online platform that aims to revolutionise e-invoicing by eliminating charges for small businesses, sees this as a dangerous trend that is crippling UK companies: “For centuries, the invoicing process has held small, innovative businesses at the mercy of others with a clear disregard of agreed payment terms and damaging cultural precedents. This is 2012 and there’s no reason why invoicing shouldn’t undergo a revolution that fits the modern times in which we live rather than acting as a noose waiting to drop around the necks of the UK’s army of small businesses.”
The full report – available to download from shiftbusiness.net/getting-paid – contains the full research as well as tips for small businesses looking to reduce the burden of unpaid invoices. Small businesses can use Tradeshift’s e-invoicing platform free of charge. For more information, visit www.tradeshift.com.
January 25, 2012
Filed under: Business Finance — Alan @ 3:01 pm
Many government buildings are sat idling and the Government is moving to sell them if possible. Where this is not possible, they are announcing that they will be available on single year leases, at low rates, to businesses. The Prime Minister said that they have office space available and that it will be made available to those who can use it; to match capacity with need.
There are more than 300 buildings owned by the Government that are not currently in use. It will be up to the tax-payer to subsidise the cheap leases, available only to smaller firms. A specialist organisation will be set up in order to both manage and to allocate the available space.
David Cameron is encouraging people to start up their own businesses in an attempt to kick-start the ailing economy. This is just the most recent step in the “Business in Everyone” initiative. Possible entrepreneurs are to be encouraged via tutorials, seminars and workshops, in a variety of free services provided by the government to small and medium enterprises.
This “Business in Everyone” campaign is being backed by many organisations as well as the Government, such as the FSB, Startup Britain, CBI and the Social Enterprise Coalition.
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