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What does the Small Business Act mean for you?


The election campaign is now well underway. But one of the last acts of parliament was to approve the Small Business, Enterprise and Employment Act. According to the government the Act will provide small businesses with the opportunity to grow, create jobs and innovate.

The Act covers many issues that concern small businesses such as access to finance, red tape and zero hours contracts.

Improved access to small business finance

SwitchMyBusiness.com recently looked at alternative sources of small business finance and our #whatbizwant campaign found that finance is a big concern for small business owners. It is something small businesses continue to struggle with. New measures will improve access to funding by increasing the availability of investment and alternative sources of finance.

Competition and more open access to credit data in the banking sector should benefit small businesses and make it easier for them to get a loan from a lender other than a bank. Only time will tell if lending to small businesses improves.

Cheque clearing times will be speeded so it won’t take so long for a cheque to clear. There will be an increase in transparency on payment practices and policies to help small businesses to negotiate fairer deals.

Red tape creates obstacles for small businesses

Red tape is always an issue for small businesses with many complaining that red tape creates obstacles to growth. Measures will be brought in to cut red tape and will be reviewed on a regular basis to ensure they are effective. Current targets require that for each new regulation two older regulations have to be phased out. Now during each new parliamentary term red tape will have to be removed to help small business grow and do business.

Fairer provision for pub tenants

The Act will introduce a Pubs Code and Adjudicator. This body will oversee the relationship between companies that own pubs and their tenants. This will ensure fairness for the sole traders and small businesses that run tied pubs – thousands of which exist across the country.

Zero hours contracts

While many of the measures are designed to help small businesses some of the measures will also help workers. For example there will be changes to rules governing zero hours contracts. Zero hours contracts are playing a big part in the election campaign already with Labour announcing they will end this type of employment contract. The Act brings in measures to stop the abuse of zero hours contracts. In the past workers have been subject to ‘exclusivity clauses’. These clauses meant individuals couldn’t work for anyone else, even if their current boss couldn’t offer them any work.

New small and micro business definitions

The Act also sees the introduction of new definitions of small and micro businesses. This will ensure that definitions used to describe these types of businesses are in line with those used within the European Union.

The Business Secretary Vince Cable said “Small businesses provide jobs for millions of people across the country and are driving the economic recovery. The Small Business Act will create the right environment for small businesses to continue to thrive by giving them greater access to finance to help them innovate and grow, and make it easier for them to export goods and services made in Britain.”

Further reading relating to the Small Business, Enterprise and Employment Act can be found on the government’s website. Or read about our small business manifesto and what our recent survey discovered small business owners want from a new government in May.

 

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