The new government plan for small business: What it means for small firms across the UK

Despite having huge potential to drive economic growth, the UK's 5.5 million small firms face rising costs and tight cash flow among other challenges.

This week, the government released its first small business plan in over a decade, and it could mark a turning point.

The plan sets out proposals to support those 5.5 million businesses across five areas: finance, trade, late payments, public procurement and local growth.

At Enterprise Nation, we very much welcome this plan as a serious attempt to reset the relationship between small businesses and government. Many of the plan's proposals reflect long-standing challenges small firms have highlighted before, and respond to themes we've championed in our recent submissions to government.

Here, we explore the key announcements and where they resonate with our calls for reform and practical delivery.

Late payment: Stronger enforcement, overdue reform

Late payments cost the UK economy an estimated £11 billion each year and are responsible for 38 businesses closing every day.

The new small business plan proposes the most significant set of reforms in over two decades, including:

• strengthened powers for the small business commissioner

• mandatory interest on late payments

• penalties for persistent late-payers

• options to reform or ban cash retentions in construction

• board-level scrutiny of payment practices, with potential new roles for audit committees or company directors

These reforms speak directly to calls for better data, stronger enforcement and the smarter use of technology, including digital tools such as e-invoicing.

We've raised many of these themes through our Select Committee evidence and Spending Review submission.

Finance: More Start Up Loans, regional equity and stronger protections

Access to capital remains a major hurdle for many early-stage and growth-stage firms. The plan pledges to:

• deliver 69,000 Start Up Loans with mentoring built in

• expand the ENABLE Guarantee programme by £3 billion

• continue £340 million in regional equity finance

• work with private lenders on the appropriate use of personal guarantees, including a mandatory Code of Conduct for loans issued under the Growth Guarantee Scheme, to ensure their use is fair and transparent

These commitments reflect priorities we've consistently championed: fairer lending, stronger borrower protections and targeted support for under-represented founders.

Exports: Expanding support and visibility through UK Export Finance

To help more firms grow internationally, the plan will:

• expand UK Export Finance (UKEF) by £20 billion, including a Small Export Builder insurance product

• raise awareness of the benefits of doing business abroad, through a programme of export roadshows and the new Board of Trade.

These steps align with our Trade Strategy submission, which called for greater UKEF visibility and support tailored to business exporters.

Public procurement: Opening up government contracts to smaller firms

Public contracts remain difficult for smaller businesses to access. The plan aims to address this by:

• setting departmental targets for spending with SMEs

• launching an SME Procurement Education Programme

• creating a Defence SME Support Centre

These measures address many of the practical barriers we've identified, including supplier readiness, simplified bidding and more transparent tracking of government's spending with SMEs.

The everyday economy: High streets, licensing and business space

The plan includes new measures to revitalise local enterprise and reduce fixed costs, such as:

• a national approach to simplify licensing and introduce hospitality and night-time economy zones

• High Street Growth Incubators in partnership with local authorities

• permanently lower business rates for retail, hospitality and leisure from April 2026

These steps respond to concerns we regularly hear from our members, particularly around the affordability of space and the health of local trading environments.

Future skills: Enterprise education

The plan recognises the importance of embedding entrepreneurship across the education system. It includes commitments to:

• expand enterprise education and competitions in schools, colleges and universities

• launch a new Youth Entrepreneur King's Award for Enterprise

These match our long-standing belief that young people should have early exposure to entrepreneurship, and with our calls to support small firms with founder-facing digital tools.

Digital adoption: Practical support tailored to small business needs

Many small businesses struggle to navigate digital transformation – and risk being left behind. The plan pledges to:

• pilot new digital adoption models tailored to small firms

• partner with industry to share best practice

• expand the Made Smarter Adoption programme, which offers targeted funding and expert advice

These proposals reflect ongoing challenges small businesses face in navigating tech choices and adopting the right tools – themes we've raised in our Spending Review submission and addressed through our Tech Hub programme.

A watershed moment for small businesses

This plan represents a genuine shift in how government understands and supports small firms. It addresses long-standing barriers with clear, practical proposals and signals a move toward policy grounded in real-world experience.

The priority now is turning ambition into action. We'll be reviewing the proposals in more depth over the coming weeks, and want to hear from small businesses about what matters most.

Enterprise Nation stands ready to work with government and partners to help deliver meaningful change for small businesses across the UK.

Read more on this topic

• Read the full government plan

• Explore more of Enterprise Nation's policy recommendations