Small Business Act
After receiving royal assent, the first ever piece of legislation devoted to small businesses, known as the Small Business, Enterprise and Employment Act (SBEE), has now become an official law (as of 26th March 2015). The government have become increasingly aware of the vital role SMEs play in securing a prosperous economy and thus the SBEE Act has been primarily put in place to nurture and protect these small and medium businesses for the future.
The new law will be of great assistance to many SMEs as it promises to create an environment with improved measures across the board, including, improved access to finance and the end of zero hours exclusivity clauses, which will ultimately help these businesses to grow and thrive.
The 11 key areas of the act are as follows:
- Access to finance
- Regulatory reform
- Public sector procurement
- Childcare and schooling
- Company transparency
- Company filing requirements
- Directors’ disqualification
- Pubs Code Adjudicator and Pubs Code
- Education evaluation
Business Secretary Vince Cable comments: ““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. The bill’s measures also mean there is nowhere to hide for firms who do not play by the rules, whether by abusing zero hours contracts or not paying the minimum wage.”
How much will this really help small businesses?
Access to finance appears to be the key point of the new law, as the government seeks to make it easier for small businesses to have access to the funding they need through a variety of different changes to the current system; for example the new legislation requires banks to pass on details of small and medium-sized enterprises they decline for a loan to online platforms which can help match them with alternative finance providers.
The SBEE Act will also aim to cut down the amount red-tape put in place that gets in the way of actually doing business. Regulations will be reviewed effectively and regularly to ensure unnecessary legislation is scrapped, enabling small firms to grow and increase the speed and frequency of business transactions.
Business Minister, Matthew Hancock said “The Small Business Act is the first set of laws specifically to help level the playing field for small business. There really has never been a better time to start and grow a business in the UK.”
Who will this help?
The small business act will act as a safety net for a lot of small businesses and will benefit small businesses at a time when they need someone to fight their corner. The law supports small businesses who play by the rules, and is a deterrent to those who don’t. Pubs in particular could benefit; the introduction of a Pubs Code and Adjudicator to manage the relationship between large pub-owning companies and their tied tenants, will bring fairness to the sole traders and small businesses that run pubs across England and Wales. It has long been asserted that tied pub tenants are treated unfairly by large pub owning companies, the introduction of a neutral adjudicator may give the pub trade a much needed boost.
One thing is clear, lending to small businesses will never be the same again, and for many these changes are welcomed with open arms.