Jessica BirdSpeaking at the NACFB Commercial Finance Expo today (11th June 2025), Caroline Lavelle, (pictured, right), chief commercial officer at the Federation of Small Businesses (FSB), warned that businesses might be presenting with HR problems when the underlying issue is a financial one.
As an example, Lavelle explained that a business leader considering redundancies might, in fact, be facing a cashflow issue that could be better solved through a lending product.
In conversation with Dame Teresa Graham (pictured, left), chair of the Administrative Burdens Advisory Board of HMRC, Lavelle discussed small to medium enterprises’ (SME) reluctance around tapping into funding resources for growth, as well as a lack of awareness of the “blend of options” available to them.
The pair discussed that SMEs currently tend to borrow more for cashflow management than growth, due to late payment activity, interest rates for small business products running higher than the market norm, and dissatisfaction with the finance options available.
Lavelle noted that overdrafts continued to be the most popular form of financial support, but that this is not a growth driver.
As a result, Graham warned, growth has “materially downshifted, with knock-on societal consequences.”
To this end, she suggested that Government should be “more discerning” with its annual contracts, providing them only to those businesses supporting others – particularly SMEs – throughout their supply chain.
When it comes to financing, Lavelle said SMEs are looking for “tailored solutions,” not simply taking into account their business profile, but also their individual characteristics, including aspects such as ethnicity, disability and gender.
She added that the market needs more options for financing for businesses with intangible assets, such as those in FinTech.
