This follows extensive research among Britain’s business owners to better understand the challenges they face when financing their business start-up and how they find the capital to grow.
With as many as one in three employees (33%) considering starting their own business or entering the ‘gig economy’ in the next couple of years, there is a significant opportunity for the Government to support start-ups as well as provide more targeted support at existing SMEs.
For ‘would be’ entrepreneurs, finding the money to get started is seen as the biggest single challenge (51%) followed by financing future business growth (44%).
Aldermore believe the Entrepreneur ISA should be considered, which could follow a similar model to the Help to Buy ISA, which sees the government provide a guaranteed 25% matched bonus to deposits between £50 to £200 per month. The bonus would be capped at £3,000. In addition, a Small Business Savings Allowance should be established allowing sole traders and small businesses to earn up to £4,000 of income from savings, tax-free per year.
Two-fifths (40%) of those already running a business say they would find an Entrepreneur ISA attractive; equating to over 1.5 million business owners in the UK.
Overall, almost two thirds (63%) of people in the UK think the Government should provide more support to help people run their own business, while this number increases marginally to 68% among those who are currently self-employed. This view is even more widespread in the Midlands and the North of England where small businesses make up a greater proportion of the local economy.
The most recent figures from Government show that in 2016, there were 1.3 million employing businesses and 4.2 million non-employing businesses in the UK, which equals to more than three-quarters (76%) of businesses not employing anyone aside from the owner.
Aldermore’s Head of Savings, Ewan Edwards says:
“Britain’s small business community is not only hard-working and diverse, but it is growing significantly. There are now more than five million SMEs, who contribute a huge amount to the UK economy.
“SMEs take significant risk in setting up their own businesses, yet often the rewards are relatively small. Working with the Government, we would like the Chancellor to use the Budget to consider ways of improving existing fiscal support offered to SMEs. This includes introducing a new Entrepreneur ISA and creating a Small Business Savings Allowance.
“Importantly, ISAs are well-trusted and understood product for personal savers, which already provide a route to savings for 21 million Britons. So creating a similar savings vehicle to help current or would-be business owners would only help to further support Britain’s Entrepreneurial spirit.”
