MPs call for better SME business support

The UK’s SMEs are now operating under pressures comparable to – and in some cases exceeding – those experienced during the Covid-19 pandemic, according to a report published from the House of Commons Business and Trade Committee (BTC), which warns poor signposting to sources of finance and fragmented business support services are exacerbating the problems.

The committee’s inquiry noted that while emergency support was rapidly mobilised during the pandemic, there is currently no equivalent, coordinated response to the cumulative pressures now facing SMEs, despite their central role in the UK economy.

Its report states: “Effective business support plays a vital role in enabling firms to start up and grow. The services available to SMEs, however, remain difficult to navigate, and highly variable across the country, with specific initiatives offered across central government, Mayoral Strategic Authorities, and local authorities.”

After taking evidence from a range of SMEs, trade bodies, lenders and others, the committee concluded “the business support landscape is fragmented and poorly organised”.

Hubs

The report is highly critical of past departmental proposals for “hubs” as a low-cost way of supplying integrated services offered by many different parts of the public realm, describing these initiatives as being “often vague in design and typically lack institutional strength, staying power, and a clear intuitively understood range of services. They are no substitute for a service designed and built for the long term.”

The committee also criticised the “disjointed” nature of the local business support offer, delivered by 41 Growth Hubs in England, with one witness claiming many entrepreneurs “struggle to compare schemes or understand eligibility”.

“Smaller businesses face a knowledge gap on what is the right finance and where to find it. We have consistently argued that an independent business information service should be established to ensure that smaller businesses can navigate a range of issues that they face.”

While the BTC welcomed the decision to grant Mayoral Strategic Authorities more autonomy over the delivery of business support, it cautioned that this alone is not guaranteed to improve the quality of these services. Many areas are also outside of mayoral boundaries, and it is possible that some regions will not join mayoralties until the end of this Parliament.

Business Growth Service

In June 2025, the government launched the “Business Growth Service”, a new website bringing together government support and advice for business owners. MPs said that SMEs who were aware of the service welcomed its potential to simplify the offer for small firms, but many also reported they had no knowledge of its launch.

UK Finance, which represents some 300 financial services providers, has stressed the importance of this new service being backed by a “comprehensive awareness raising campaign with SMEs”.  

“We also have, coming up soon, a major marketing campaign on that to encourage people to take advantage of the advice that is there.

“I should also say that the Business Growth Service is an extraordinary leap forward in business advice, but it is far from the end of the story as far as we are concerned. We are looking for what else we can put under that umbrella.” McDougall said the department considering incorporating AI tools into it so that people can find and get more tailored advice more quickly within it.

Recommendation

Representatives of Goldman Sachs 10,000 Small Businesses UK programme suggested the UK should learn from the example of the US Small Business Administration (SBA). The SBA combines online guidance and advice with specific support at the state level offered through SBA district offices, and Small Business Development Centres (SBDCs). 

Oversight of these local services is provided by the SBA’s Office of Field Operations which establishes and monitors performance goals for each district office, with an emphasis on improving “SME financial readiness”.

This view chimes with that of the FLA in its submission which stated: “This service’s starting point should be to identify the businesses requirements e.g., what do they wish to do as opposed to the finance they need to do it. It should also aid the business in becoming ‘match fit for finance’.”

Improvements in SME support services and information providing were picked up by the BTC in one of its key recommendations, with MPs proposing:“The government should build a business support service that is fit for the long term, like the US Small Business Service. It should combine these services with arrangements for transforming access to finance, export finance, public procurement, skills, export support services, and general business advice. It should study best practice internationally and present a White Paper to Parliament with the design of a service that matches the challenge.”

“The question this report raises is whether the system they operate in is producing the best long-term outcomes for the businesses they serve,” he said.

“Finance Connect has been testing market views on this for some time. We are examining whether the industry is too focused on individual transactions, when what many SMEs really need is a framework designed to support their whole journey — from first borrowing through to sustained growth. Lenders, brokers, trade bodies, policymakers and the British Business Bank should now come together to address that gap. This is exactly the conversation Finance Connect is convening – it will be a major focus in our Summer Conference.

“Finance Connect are cautious about relying too heavily on government-funded programmes to fix what is fundamentally a commercial market. The US Small Business Administration has been widely criticised for being slow, bureaucratic and cumbersome — a pattern that tends to repeat when governments try to design services for markets they don’t operate in. CDFIs show real promise, but their role should be to fill the gaps in commercial provision, not to replace it. The serious expertise in this market sits with the specialist finance providers and brokers who focus on loans, asset finance and receivables finance every day. They are the people who will ultimately succeed or fail in extending the industry’s horizon beyond single transactions — and they should be leading the conversation.”

To explore the challenges facing SME lending in more depth, register for the upcoming Finance Connect webinar, SME Finance: what needs to change to create better outcomes for SMEs, brokers and lenders? Sponsored by NETSOL Technologies, the webcast will take place on Friday 13 February at 1pm and will bring together industry experts – Paul Goodman, Steve Bolton and Jason Hurwitz – to discuss current pressures in the market and potential reforms. Register now.