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Rishi Sunak is elected new Tory leader. Here are 5 things businesses can expect from the new Prime Minister

23 Oct 2022

The former Chancellor of the Exchequer will succeed Liz Truss as Britain's next Prime Minister, it was announced today. Below, we'll discuss the possible implications on businesses the new PM might bring as he steps into office.

The former Chancellor of the Exchequer will succeed Liz Truss as Britain's next Prime Minister, it was announced today.  Below, we'll discuss the possible implications on businesses the new PM might bring as he steps into office.

Brexit

Coinciding with the Queen's Speech in May, Mr Sunak promised, if elected, he would appoint a Brexit minister to go through the remaining 2,400 EU laws still on the statute book, focusing specifically on scrapping regulations on financial services. The new PM intends to cut the "red tape in the financial sector" and trigger growth similar to that seen in the 1980s.

Should new opportunities arise, SMEs may require upfront deposits or capital at the ready. Whether tendering for contracts that could take your business to the next level or building the technology you need for better performance, you might need to secure funds beforehand.

Short-term business loans, such as revolving credit facilities, can be accessed quickly and with minimal fuss.  If you know what you need to do in the short run (and how finance can help you reach that goal), a short-term growth loan based on your turnover and revenue could be the right solution.

Get a revolving credit facility

Business rates 

Speaking at an event in Darlington on August 12th, the new Prime Minister pledged to extend the current 50% business rates reduction in his first Budget. He said that small retailers are the "beating hearts of all our communities" and vowed that supporting high streets would be at the "very top of my mind" should he win the race.

If your business is already suffering from the business rates tax, you might consider freeing up some of the capital in your premises, effectively ensuring that the property pays for itself through asset refinancing, pledging the property as an 'asset' to secure a loan, with the property becoming collateral. 

Once the principal amount and any fees and interest are repaid, ownership of the asset is returned free and clear. Buildings, land, unsold stock, plant machinery and equipment can all be used in asset finance. Because the loan is secured by collateral, costs are typically lower than other types of business finance.

Get asset finance

Corporation Tax

As Chancellor, Sunak pledged a rise in corporation tax from 2023. Climbing from 19% to 25%, the proposed increase will be a bid by Mr Sunak to "boost business investment" and "improve the country's weak economic growth prospects".

With January fast approaching, and with it, the taxman, businesses who aren't aware of their funding options will suffer the most. We all know paying off tax bills takes a considerable chunk out of your coffers, and it's never something business owners look forward to. 

However, it's essential to manage these payments year-on-year (or quarter-on-quarter) whilst maintaining a comfortable level of working capital to keep your business ticking over. A tax loan can help you spread the cost of your obligations to HMRC into affordable monthly payments.

Get a tax loan

Covid-19 Recovery Schemes

As Chancellor, Rishi Sunak oversaw the country's finances throughout the pandemic and was the man behind many COVID-19 support loans. He was also instrumental in extending the state-backed Recovery Loan Scheme by a further two years.

However, for business owners looking into recovery schemes, there are, in many cases, better lending products that offer more choice and control compared with the RLS. 

Businesses may be able to borrow more than they would through the scheme and might also benefit from better interest rates. What's more, there's a much broader selection of non-RLS product choices out there to choose from. 

Check out our business loans guide for more information. 

Business loans guide

Inflation

Perhaps the biggest problem keeping SMEs up at night is the rapid rise in inflation,. The Bank of England is widely expected to raise its base rate by 0.75 percentage points early next month. Sunak has argued that getting control of inflation - the rate at which prices are rising - is the most pressing issue, and lowering interest rates, which will, in turn, encourage more businesses to invest in expansion.

If your business is currently struggling with inflation, you might consider getting finance to bridge the gap or to maintain healthy cash flow levels. 

For example, working capital finance is a type of business finance designed to boost the working capital available to a business. Working capital loans are generally, over a short or medium term, designed to raise cash or to go after new opportunities. 

Get working capital finance

Next steps: How can Funding Options help?

While the above contains some reassuring news for SMEs, we understand that many businesses might still require funding. 

Funding Options helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options can introduce applicants to several providers based on the applicants' circumstances and creditworthiness, with all quotes subject to status and income.

Our award-winning platform, Funding Cloud(™), accurately and quickly matches businesses with the right lender and finance option for their needs. From unsecured business loans to revolving credit facilities and a merchant cash advance, we work with over 120 lenders offering dozens of lending products. Apply for funding in minutes - our record from application to credit approval is just 20 seconds, and cash in the bank within as little as 18 minutes. 

Apply today to get the funding you need to trade, plan, and grow with confidence.

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