B2B Payments

SMEs Get Political On Banking, Cash Management And More

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Amid geopolitical turmoil across the world, small businesses are looking at their governments to promote growth and financial well-being. In the U.S., SMEs have health care and tax reform at the top of their lists, with most small business owners hoping the government will slash red tape as a whole. Top regulatory concerns differ in the U.K. and Australia, though, with small business banking and late B2B payments weighing heavily on entrepreneurs’ approach to politics.

$20 billion in unpaid invoices leads Aussie SMEs to call for government action. According to the latest data from Xero, which called this figure “astronomical, ”the issue of unpaid supplier invoices means SMBs in Australia are dealing with mounting debts — and want regulators to do something about it. According to Xero, 79 percent of SMEs said they have already supported the government-backed policy to promote faster supplier payments, with 86 percent telling Xero that they want the government to do more about the matter. Specifically, 84 percent said they want the government to encourage a fairer system for SMEs to compete for contracts, and 70 percent said they want the government to encourage a level playing field between SMEs and large corporations. The data comes out ahead of a report by the Australian Small Business and Family Enterprise Ombudsman.

44 percent of U.S. SMEs cite health care as the number one government issue affecting their business, surpassing tax reform (41 percent). The data, released by BizBuySell, suggests small businesses are paying close attention to President Donald Trump’s policies that impact SMEs, as more than a third of small businesses surveyed said they have been financially penalized for an error they made in the nation’s tax code. Meanwhile, 60 percent of SMEs said they want Obamacare repealed. Overall, though, small businesses are struggling to navigate the regulatory waters: 71 percent of small business owners said there are too many regulations — less than 5 percent said there are too few.

Two-thirds of SMEs say they rely on banks to grow in the U.S., and more than half of small business executives said regulatory relief on those banks would ultimately help the small business community. That data was presented to the U.S. Chamber of Commerce, which commissioned a survey by Morning Consult, released last week. The report, announced at the Chamber’s Capital Markets Summit, also found that 40 percent of SME executives are planning to increase capital investments and boost staff levels in the next year, though 60 percent said their ability to access affordable credit hasn’t improved in the last year. For the small businesses that have accessed financing, most have done so through traditional banks, with nearly 90 percent saying their experience with their primary lender has been a positive one.

15 new challenger banks could be headed to the U.K. market as regulators promote greater competition in the banking space. But whether or not these market entrants are helping small business customers is in question. A recent report by Bridging & Commercial found 71 percent of brokers said they were not confident advising SMEs on challenger banks. According to one industry player, OakNorth, it’s more difficult to compare products and services across banks. According to the Federation of Small Business, the four largest U.K. banks hold an estimated 80 percent of the business finance market and have thus promoted the entrance of new players to inject competition into the space, but with brokers unable to advise SMEs on challenger banks, it’s unclear how effective their presence in the market will be.

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