13.08.25

Government Announce New Support for Small Businesses

Small Business Support

The UK government has unveiled its Support for Small Businesses Plan, a sweeping strategy designed to boost the growth potential of the country’s small and medium-sized enterprises (SMEs).

Described as the most comprehensive support package in a generation, the plan addresses several long-standing barriers to SME growth. These include late payments from larger firms, limited access to finance and the urgent need to revitalise high streets. The plan represents a decisive step towards unlocking the full potential of a sector that employs 60% of the UK workforce and generates £2.8 trillion in annual turnover.

Cracking Down on Late Payments

A key pillar of the plan is a targeted crackdown on late payments, which cost the UK economy an estimated £11 billion annually and force 38 businesses to close every day.

New legislation will strengthen the powers of the small business commissioner, enabling spot checks and fines for larger firms that repeatedly delay payments to the SMEs that supply them. The reforms will also introduce mandatory interest on overdue invoices and set a maximum payment term of 60 days, reducing to 45 days after an interim period. These measures are designed to give SMEs greater certainty and improve cash flow.

Commenting on the plan, Prime Minister Keir Starmer said, “From builders and electricians to freelance designers and manufacturers—too many hardworking people are being forced to spend precious hours chasing payments instead of doing what they do best: growing their businesses. It’s unfair, it’s exhausting and it’s holding Britain back. So, our message is clear: it’s time to pay up.”

Boosting Access to Finance

To close funding gaps and help SMEs invest and grow, the plan introduces a significant package of financial support, as follows:

• £1 billion for new businesses, including 69,000 Start-Up Loans and mentoring support
• A £3 billion boost to the British Business Bank, increasing its total guarantee to £5 billion under the ENABLE programme to help lenders offer better loan terms
• A mandatory Code of Conduct for personal guarantees under the Growth Guarantee Scheme developed in collaboration with lenders to ensure fair and transparent lending practices

Revitalizing High Streets and Local Communities

The plan introduces a series of reforms to support high street businesses and strengthen local economies, including the following:

• The permanent lowering of business rate multipliers from April 2026 for retail, hospitality and leisure properties with rateable values below £500,000
• A ban on Upward Only Rent Review clauses in commercial leases
• The championing of High Street Rental Auctions to bring empty properties into use and the introduction of a new Community “Right to Buy”
• Funding for up to 350 communities to lead local regeneration efforts

Additional Measurers to Support SME Growth

The Small Business Plan also outlines initiatives to future-proof SME capabilities through continued investment in leadership training and the expansion of the Made Smarter Adoption Programme to accelerate digital transformation. Additionally, it aims to improve access to government contracts and export markets while streamlining business support services.

Conclusion

Although the measures announced in the government’s Small Business Plan aim to unlock growth and bolster resilience across the SME sector, SMEs continue to face exposures, especially amid the uncertain economy. As such, business insurance remains a critical financial safeguard, helping SMEs manage risks, maintain continuity and recover from unforeseen events. For more information about the government’s Small Business Plan, visit the government website

For additional SME guidance and robust insurance solutions, contact us today.

Information provided by Zywave and contributed to by  Harrison Law, (Cert CII) Head of Commercial & Private Clients, Cox Mahon Ltd.