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Will contractor accountants soon be helping more start ups?

Will contractor accountants soon be helping more start ups?

The work and pensions secretary, Iain Duncan Smith, plans to help Britons long-term unemployed start up their own business.

Smith told the Conservative Party conference that financial backing and support would be available to people who have been out of work for over 6 months.

Up to £2,000 in financial support would be made available through the New Enterprise Allowance and the government would arrange mentoring to help new entrants and contractors to the business world.

The government hopes to create 10,000 new small businesses and limited companies through this initiative and is part of a radical shake up of the entire welfare system.

Included in the proposals is a move that will see benefits streamlined so that recipients receive just a single payment.

It is believed that the high street banks will shortly announce a new fund dedicated to lending to SMEs. Although details are yet to be finalised, each institution would be injecting tens of millions of pounds into the fund. And to give small businesses a better chance of having their loan approved, a mentoring programme to advise on their capital structure will also be set up.

Any move to encourage the banks to lend more will no doubt be greatly appreciated by SMEs. A new report shows that 18% of small business owners are turning to alternative funding sources in order to stay afloat. 10% of business owners have turned to family and friends, 7% are using their credit cards for business finance and 7% have turned to loan companies for help.

One third of SMEs have had to make cuts in the workplace with 47% reducing their use of utilities, 38% cutting expenditure on staff refreshments and the same percentage cutting back on travel expenses.

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Image: growth by iChaz

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