The Autumn Budget and spending review:
Every year, the chancellor of the exchequer makes a Budget statement to MPs in the House of Commons. The statement outlines plans for raising or lowering taxes and draws attention to what the government will focus investing on. This can include a concentration on schools, health, policing and public services along with a host of other key important sectors. This year we have seen two Budgets, with the first one announced in March.
Since the Covid19 pandemic, the government needs to cut the gap between what it spends and what it raises, especially considering the record amount of government borrowing (£320bn with an extra £180bn expected to follow this year). The Budget already follows a major tax rise in September, more can be read about this here.
You can read the Government’s full Autumn Budget and Spending Review here. But to summarise:
The summary:
On October 27th, 2021, Chancellor Rishi Sunak announced the Autumn budget and financial plans for the year ahead in the House of Commons. The Chancellor’s plans for the budget had a “post-Covid” agenda and were designed to pave the way for a higher wage economy with a focus on higher skills and raising productivity. The Budget takes place as the country focuses on recovering from massive economic uncertainty brought about by the pandemic, and, to a lesser extent, Brexit.
The Budget sets out the government’s plans to “build back better” by investing in strong public services, driving financial growth, supporting businesses, and focusing on the climate. ‘Levelling up’ was a strong theme in the Budget, with a large emphasis placed on reducing regional financial inequality throughout the UK.
The government’s vaccine programme and pandemic support has helped prove the resilience of the economy, and growth has been faster than anticipated. With a commitment to investing in Research and Development as a focal point for Autumn’s Budget, the UK looks set to grow out of the pandemic even faster than predicted.
Furthermore, the government placed an emphasis on ‘building back greener’ and continues to have the most ambitious emissions reduction targets for 2030.
Further Funding for the Midlands:
Autumn’s Budget presented great news for all of us here in the Midlands as the Chancellor announced a new £400m allocation for a new Midlands Engine Investment Fund (MEIF) to be delivered by the British Business Bank. This brings the total for investment in the region to over £700m.
The announcement highlights a significant commitment by the government to support access to finance in the Midlands where there have been market gaps. This next generation of MEIF will deliver significant scale growth capital for business through the set-up of a new fund providing debt and equity to firms in the region.
Furthermore, an extra £50m has been assigned to the current MEIF programme to take it to £300m. This will ensure that funding continues whilst the next generation of MEIF becomes operational.
RLS Extension and Help for SMEs:
As part of the plan to level up and build back better, the government is building on the existing unprecedented support for business owners that have been affected by the pandemic. Plans to help businesses recover, invest, grow, and create jobs are underway.
One such plan to complete this goal is the 6-month extension of the Recovery Loan Scheme (RLS) which will now be extended until June 30th, 2022. This extension of the RLS ensures that lenders can continue to have the confidence to lend and support SMEs. Finance will be available up to a maximum of £2 million per business (coming into force on 1st Jan 2022) which will definitely help SMEs to recover from the pandemic and focus on growth and development. The scheme has already seen total funding of over £1bn offered to businesses by the scheme’s diverse range of accredited partners.
The Budget also included funding for 33,000 Start Up Loans over the next three years which will enable even more people across the country to start a business. To quote from British Business Bank: “The programme has a strong record of providing funding to less well represented groups including women, people from diverse ethnic backgrounds, and the unemployed. This new funding will help create more opportunities for the best talent to access finance regardless of factors such as social background, gender, ethnicity and age”. This is sure to see the beginning of many new small businesses across the UK! To read more about this and other Budget-related announcements, click here.
Our MD, Paul Goodman, commented that: “It was welcoming news to see the Chancellor extend the Recovery Loan Scheme for a further 6 months. Having delivered in excess of £1 billion of loans to SME’s since it launched earlier this year, it is proving to be a useful tool for our experienced team. Several of our clients who took on the Governments challenge to accelerate out of the pandemic have benefited from the scheme. The scheme has provided significant growth funds to retain and drive further employment, grow sales and profitability, and ultimately help UK PLC survive and thrive.
With 75 accredited lenders by the British Business Bank under RLS and no doubt more to come. There are plenty of options for our team to support businesses who think they might be in need of support from the scheme, especially when you couple this to our panel of over 280 banks and lenders.
I was also delighted to see the continued commitment from Treasury to the British Business Bank. They have been a shining light throughout this pandemic, a beacon for funders and businesses to navigate out of this pandemic period. The £1.6bn commitment to the next generation of regional funds will make a huge difference to SMEs across our Nation. With more than £1bn deployed already, we look forward to working with all the regional fund managers to deploy some of this extra funding.”
Chris Meldrum, national business development director, invoice finance at Aldermore, said: “During the Covid-19 pandemic businesses across the country have had to navigate uncharted waters, and as we emerge from the lockdown restrictions, we take invaluable learnings that will help move businesses forward to the next stage of growth.
At Aldermore, we’ve supported SMEs throughout the pandemic, we were an accredited lender under the Coronavirus Business Interruption Loan Scheme and more recently the Recovery Loan Scheme.
Supporting SMEs as they recover from the Covid-19 pandemic is crucial for the UK economy moving forwards and so we welcome the extension of the Recovery Loan Scheme by the government. The Recovery Loan Scheme is enabling us to provide funding support, which will help SMEs continue to bounce back and grow following the impact of the pandemic. We remain committed to backing businesses to achieve their goals and ambitions and can offer a variety of funding solutions to meet their needs.” *
*Subject to status. Security may be required. Any property or asset used as security may be at risk if you do not repay any debt secured on it.
How we can help:
If your business requires finance and you’re unsure of where to go from here, you can speak to one of our in-house experts. We pride ourselves on full UK coverage and over 100 year’s combined experience within the Goodman Team!
As industry leaders in Asset Based Lending and having won Invoice Finance Broker of the year, we have built a reputation for our outstanding services and a client centric approach. We can confidently conduct a full business finance review and offer one of the best, well-vetted lending panels in the UK Market.
We offer financial planning for cashflow gaps, MBO, MBI, acquisition finance, capex or property purchase. We have also have long and successful track record of supporting all sectors from construction, engineering, manufacturing, recruitment and many more! To read some of our case studies that attest to this, click here.
Goodman Corporate Finance is the perfect broker to help you take advantage of the RLS extension for your business needs!
By Elicia Boni – Digital Marketing and Content Executive
If you are interested in learning more about Goodman’s bespoke broker services and how we can help your specific financial needs, then you can click on the relevant links: Asset Finance, Corporate Finance Services, Invoice Finance, or Property Finance.
Already have an idea of what type of financing you require? Don’t hesitate to get in touch. Contact us here or call us now on 0333 3583502 for a free consultation with one of our expert corporate finance specialists.
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