The small business round-up: June 2022

  • 08 Jun 2022
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This episode covers all you need to know on the latest issues impacting small businesses, including new resources available to help LGBT+ small business owners and employees; and why small business bank lending is reducing.


Craig Beaumont, Chief of external affairs, FSB;




 Ruth McElroy, Communications and Public Affairs Advisor at FSB;




 Adrian Innes, chief revenue officer, Finpoint




Full episode transcript:

Jon Watkins Welcome to the latest First Voice monthly roundup podcast brought to you by First Voice magazine, the official flagship magazine of the Federation of Small Businesses, and the go-to podcast for news tips and important information for small businesses and the self employed. This episode is our June Small Business Round Up, in which we will take a look at some of the important issues hitting the headlines at the moment, and which you need to be aware of right now as small business owners. To help us look at issues this month. I'm pleased to say I'm joined by three guests. To begin with Craig Beaumont, Chief of External Affairs FSB, and Ruth McElroy Communications and Public Affairs Adviser at FSB, Scotland are going to talk to us about FSPs new digital resource hub to support and encourage LGBT plus entrepreneurship and promote inclusivity in workplaces. And then after that Adrian Innes, Chief Revenue Officer of small business financing platform Finn point will talk to us about trends we are seeing in terms of small business bank lending, and how you can obtain finance if some of the traditional routes are no longer as open to you as they once were. Thank you all for for joining. Craig and Ruth, I'll start with you if I may. Can you just start by telling us what the new digital LGBT+ hub is for exactly, is it to support LGBT+ business owners or to help business owners better support their staff? Or indeed both?
Craig Beaumont Thank you. So this actually came from discussions with FSB members FSB LGBT+ members and with the government, there was launching a new set of initiatives around LGBT+ entrepreneurship. So there was clearly a gap for an online digital hub which gave advice and help for LGBT+ plus entrepreneurs. And in that kind of gap, we thought, well, why can't FSB fill that? We see large corporates doing a you know Pride Month, which is one about now doing a rainbow wash of their logo. You see the rainbow flag across everything from you know trains on the rail network or the other day the Royal Mint launched a new pride rainbow coin and Sainsbury's are filling their stores with rainbow bunting. This all feels good and a bit generic, but also not massively meaningful. So we wanted to think, Okay, if the UK has 500,000 small business owners who are LGBT+, what do we do? What do they need? Do they need a space? Do they need somewhere where they can swap stories and swap advice. And do they need somewhere where they can order assets and things that they can then use. So we decided to build one, the primary audience is on LGBT+ business owners. So whether you're a small business owner, small employer or a sole trader, that's the primary audience. But we're also going to move into areas about supporting LGBT staff later on. And we have had piles of positive feedback and we're very proud about it.
Jon Watkins Great. And Ruth, what what what sort of resources and support can small business owners find there?
Ruth McElroy Yeah, so I think it's really important to us that we speak to the community, as a community that we are representing voices from the breadth of the LGBT+ spectrum. So front and centre. Absolutely, first and foremost, our member stories. So we have small business owners from across the country who represent different intersections within the LGBT+ community, who have different experience who have told us what it is like for them to be running their small businesses, as members of the LGBT community to well, that is, first and foremost, we have a lot of, we have a bunch of other stuff on there. Personally, I'm quite fond of we have little pride badges. So it's an FSB rainbow logo, which is not quite what Craig described a minute ago as rainbow washing. You know, I think I find I'm really proud to work for an organisation where whilst we have admittedly slapped a rainbow on our logo, we've done so much more to support it, but it's a very neat little enamel badge. And you can go on there and grab your own if you'd like it. We also have a few more physical and digital assets. So posters to kind of mark that yours is an inclusive workplace. And I think, to go to what Craig was speaking to a moment ago, that's into the piece about making sure that employees as well as employers feel supported, it's a way of signalling that this is a safe space, which is something that's really important for the LGBT+ community. And then last, but by no means least, we also have an online free monthly networking event where LGBT+ members of the small business community can come together and discuss their experiences.
Craig Beaumont I was just going to add to that, you know, if you think about our membership, while we think, you know, maybe half a million small businesses will have a direct and interest as their own identity and their own business. Actually, as you look forward, it will be those who are looking to improve their workspaces you may be then grow as a number. But the core membership offer the core member services that we offer are for all members, I think that's important to reiterate, we're not providing new services, this is just a resource, this is additional to all the brilliant benefits that all members get. So we're not being if you like reducing it and targeting it.
Jon Watkins Okay, you talked a bit about you know, why FSB feels the right organisation to offer this and you talked about, you know, being inclusive of all all groups, but you know, how exactly can this type of hub help small business owners to grow and develop their businesses? What are some of the numbers behind that?
Craig Beaumont Increasing numbers of diverse groups are growing a business, I think we are way beyond the time when, you know, we used to have a stage where 80% of businesses were run by very similar people, you know, older people, white people, male, that was the population. And in fact, we're now seeing a third of businesses and more and rising are women, business owners, we've got 25% say they have a health condition or disability, we're seeing young people really arrive and change the business world as they do, you no longer need to wait for years, and then decide later to set up a business. And we're seeing side hustles, in particular, taking over as people in jobs, start a business idea as a hobby, and then monetize it, then it grows. You know, all these different groups are now appearing. And what is really interesting for me is actually later on, we'll be looking at older workers, again, people who have come to the end of their working life as they think working for someone else who were made redundant, there become for the moment they become economically inactive. We've seen half a million people becoming economically inactive, who've decided that standard work is not for them. And we know speak the FSB members that actually setting up in small business is the way forward, you know, this might be the life for them. So I think you're seeing this diversity breakthrough right across the Small Business movement. And I think this therefore plays into that.
Adrian Innes Okay, and I understand this is sort of backed by UK Government, there are some other pretty influential bodies behind it. Is that right?
Ruth McElroy Yeah, absolutely, we've been, we've been really pleased by the support that the UK Government has given us. So Mike Freer, the equalities minister, has provided us with some nice content as reiterating the UK government's support. And indeed, the former UK Government, LGBT+ business champion, Iain Anderson is again, one of the kind of cornerstone figures on our resource hub, sharing his experiences and his views. So it's been really, great to get that high level senior governmental support, and know that we have the backing from such high authorities. But nevertheless, it is also important to us that we represent the breadth of the plurality, you know, and at FSB, one of our kind of core mission values is that we want to represent the breadth and the plurality of the small business community. And certainly, that applies to represented the breadth and the plurality of the LGBT community. So certainly, whether that's getting involved with local pride events, which we'll be running throughout the summer, whether that's getting in touch with some of these businesses that are attending our networking sessions, raising visits with them, perhaps linking them in with local politicians, and bringing their experiences to local stakeholders, we're really, really proud and pleased to be able to kind of, you know, hit the intersections of, so for example, if you are in a remote rural area, and you're an LGBT+ business person, you will face a range of challenges that relate to both of those facts, for example. So it's important that we're able to kind of bring to light, what the impact of both of those factors is, and I think we come from a place of expertise and dealing with our local staff and our local circumstances. So being able to bring that experience to bear on a whole different set of identities and opportunities and challenges that come with that set of identities is something that we're really excited about.
Jon Watkins And is there an element here that, you know, a resource such as this can help some business leaders overcome perhaps some of the unconscious bias that they might have, you know, perhaps don't even realise that disadvantaging certain groups. As a result, they're dealt with that sort of thing.
Craig Beaumont There is, but I do worry that some of these words can scare people off like unconscious bias. If you if you have words that challenge people, then you will often get people's backs up, what you want to do, people don't want to be preached to you, we know this from our members, they want to, but they do want to do the right thing. So if you like we're playing into that idea where obviously LGBT+ is always known as the primary audience, and they want to share each other's experiences, connect. And that's really what FSB's bread and butter is. It's what we do. It's literally what we do, connecting small businesses with other small businesses. But the secondary market is going to be actually interesting as we develop it. So as all employers want to make sure they're looking after their LGBT+ workforces. So people in the workforce, who are lesbian, gay, bisexual, trans, or any other areas within the plus, a lot of people reach out for information, they don't know where to go. So they often go to the government, well, maybe they can go to a business association, actually, as well, because we've got expertise now, where they can, you know, as they're planning, their recruitment, as they're planning, how to operate, they can come and talk. And we do find that, especially the moment when there's a skill shortage, there's real trouble recruiting people, it is an employee's market out there, that having that thing that says, I am an inclusive workspace, you know, look at what I'm doing in this area, that does attract more candidates certainly attracts more LGBT+ candidates. But actually, I think it attracts more people who look at that as a measure of a good business doing the right thing. So you don't have to get everything perfect. You don't have to get every you know, you don't have to be able to spell the long acronym of LGBT+ and all the rest, but it's just about doing the right thing. And the number of people who have come forward that said, we didn't we haven't thought about this before. And this is cool, is really, really positive. And FSB itself set up an ally scheme. So my straight colleagues set up an ally scheme, which led to the pin badge, which we're now rolling out to members, and you just look at that as a project and go, you know, what, that came from a group of people trying to do the right thing. And it makes me proud as an employee of FSB to see that happening.
Jon Watkins Okay, and if people want to go to the business organisation for that resource, and that information, where exactly do they go with?
Ruth McElroy So very straightforward. It's just But if you come to our website,, it will be sitting nice and front and centre, at least throughout the duration of Pride Month.
Jon Watkins Brilliant, thanks very much, both of you. I want to move on to another topic that's been pretty prominent in the media in recent weeks, given lots of what's going on around cost of living and other sort of economic climate. And, Adrian, I'd like to talk to you a little bit around that and that sort of bank lending trends to small businesses, what trends are we seeing in this space at the moment? I understand it's becoming more difficult for businesses to attain bank lending.
Adrian Innes I think you're absolutely right, it is becoming more difficult to obtain bank funding. We've had periods of BBLS, we've had CBILS, we've had the recovery loan scheme that's due to come to an end, which is soon to be replaced by this new government scheme, a 3 billion pound per year that they're looking to put out. But what we've seen in the marketplaces is banks have been inundated with applications from their own customers that bounced back loans or CBILS loans, you know, the CBILS loans up to 250,000 pounds without guarantee. And that's been the go to proposition, it's now going to go back to you know, looking at alternative funders and challenger banks are coming into the market with their own proposition. And the chance to actually, you know, get funding from there, you know, so what we've found, certainly is that, you know, the UK banking landscape has changed. And it's no longer relying on your existing bank to fund you know, shop around and use the marketplace and use alternatives that can provide that.
Jon Watkins Right. And your Bank of England figures show the annual growth rate of lending to small businesses is at an all time low, what impact does that have on small businesses? What risks does it pose to them? And I guess, particularly, you know, at a time when they are they've been through a period of some of those challenges that you just mentioned, and other challenges coming down the line?
Adrian Innes Yeah, I suppose. So we're looking at impact and we'll look at risk and the impact is, you know, it's there for it. They've been through businesses that have been through two and a half years of turmoil. They've been through the pain of, you know, the bounce back loans, CBILS loans and looking at our opportunity and their turnover hasn't recovered, you know, not yet. And banks are placing, you know, affordability Ahead of service ability, and they are looking at affordability from our point of view that is wrong from my position. You know, they're they're looking at 2020 accounts, 2021 accounts, which is, you know, impractical, they should be looking at the 19, and then allowing a forecast forward to 23, to see where they can actually the business can recover. In relation to, you know, how they recover. It's, you know, they, they need additional funding, you know, the three months of lockdown, we thought was going to happen happened to be two years, you know, it was seismic, and compared to what we thought it was going to be, you know, so 90 billion of funds out under CBILS or BBLS and bounced back into recovery loan, which is, again, not as my job taking recovery loan, and then you've got the new government scheme that's coming in. So, you know, it's looking at all alternative options that can actually, you know, fund what you're looking for.
Jon Watkins Yeah. And you mentioned there, the new government, 3 billion pound a year loan guarantee scheme will replace the broad set of emergency financial support measures that were brought in during the pandemic to support businesses, how is that change going to impact small businesses in terms of accessing the liquidity they need?
Adrian Innes To be honest, it's not. Is my honest opinion, because it's, it's moving back to ESG enterprise finance guarantee or small firm loan guarantee, which these were these, these were both funds that were pre, you know, the COVID, and the CBILS funds, and they were never taken up by funders, and banks didn't promote them. Banks specifically didn't promote them, and they didn't like them, you still need the you know, the personal guarantee, you know, when I've read about it this morning, you know, so I don't see 3 million or 3 billion, actually making an indent to what we actually need in the marketplace is now, which is solid support for businesses under a recovery scheme to continue.
Jon Watkins And what else would you like to see from government to sort of stimulate lending to small businesses,
Adrian Innes it's difficult, I'd probably like to see UK business finance and British Business come into the pot, and put a lot more sort of pressure on, you know, funders, effectively the high street funders to actually make, you know, a difference in relation to funding. You know, we're finding that the high street banks are lending to their own customers to a certain degree, or they're restructuring to their own customers to a certain degree. And that's where they're getting their figures from when they they publish figures about lending. And it's a case of restructuring. But it's about, you know, looking at the 19 financials, and then projecting to 23.
Jon Watkins Lots of alternative routes for businesses to take in terms of sort of accessing finance and funding and liquidity. So we've done podcasts on that previously, looking at that in great detail. Your organisation provides a platform to access some of that, can you just give us a quick overview of a couple of the options that that small businesses might be more likely to take as alternative routes to, to access in finance?
Adrian Innes Yeah, so I suppose that you know, if you use it the funding platform, you've got 136 different funders on panel, you've got over 200 products. So if you look at invoice finance, asset, finance, you know, recovery, normally cover loan scheme, but, you know, overdraft facilities, term loans, commercial, unsecured, bridging, you know, wherever, so there's various routes to sort of secure funding, and it's making sure that you get the right funding for the right purpose. We're finding a lot of challenger banks, Starling, for example, have come into the market, they started off with, you know, a recovery Loan Scheme, they will expand that and grow into that market there as well. You know, and these are all opportunities for like shopping around, you know, finding the right business, the right funder or the right platform that will actually help you.
Jon Watkins Fantastic. Listen, Ruth Craig, Adrian, thank you so much for for taking us through those key Small Business announcements and stories that are in the headlines right now as part of our monthly Small Business roundup podcast series. That was really helpful. Thank you also, to our audience for listening to this episode. While I have your attention, I would just like to remind you that you can subscribe to the First Voice podcast to receive regular updates and guidance on the big issues affecting small businesses. And do please also remember that you can find a whole host of additional webinars, podcasts and other content on the First Voice Website at Many thanks.


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