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Posted: Mon 20th Jul 2026
12 min read
One year ago, the government published Backing Your Business, its first dedicated plan for small businesses in over a decade.
For the UK's 5.5 million SMEs, this represented a sweeping attempt to address long-standing pain points – from late payments to access to finance, regulatory burden to skills shortages.
This week, the Department for Business and Trade published a progress report on how the first year has gone.
VIDEO: The Small Business Plan one year on: What has been delivered so far
We spoke to Blair McDougall MP, Minister for Small Business and Economic Transformation, in an exclusive Enterprise Nation webinar on the topic:
One year after publishing its ambitious small business plan, the government has delivered a double blow to the barriers holding back Britain's entrepreneurs: a £4 billion expansion of lending support and legislation to end the scourge of late payments that forces dozens of businesses to close daily.
Speaking to Enterprise Nation members, the Minister described the doubling of the Growth Guarantee Scheme just hours after banks had agreed to "open the taps" on lending to an additional 12,000 businesses annually.
The Minister told the online gathering:
"The thing I enjoy so much about this job is meeting entrepreneurs who have had that spark of an idea, that moment of creativity.
"But that has to come together with money to be something more than just a dream or an idea."
The Minister said the expansion of the Guarantee would allow entrepreneurs "who perhaps have not been successful in the past to take the opportunity to try again."
On late payments, he drew on his own experience as a small business owner, describing the familiar anxiety of "hitting refresh on the business bank account, desperately [waiting for] that big invoice that you've been waiting on for months."
The legislation now before Parliament, he said, would "flip the whole power relationship between small companies and their big customers."
He continued:
"We as a government are not going to tolerate any longer the situation where big companies use small companies as a source of free credit.
"And as a result, dozens of businesses going out of existence every day because of it."
The new legislation makes interest on late payments mandatory rather than something entrepreneurs must plead for.
It also grants sweeping powers to the Small Business Commissioner to investigate and levy substantial fines on companies with poor payment practices, crucially removing the burden from small firms to report their own customers.
"It isn't incumbent on a small company to complain and report against their own customers," he emphasised, acknowledging the impossible position many find themselves in.
While the 60-day payment ceiling remains in place for now, prompting questions from attendees about moving to a 30-day standard. The minister said the government views it as "a ceiling, not a floor" and would consider reducing it to 45 days.
Public sector contracts have already moved to 30-day terms.
Electronic invoicing, he added, would "remove some of the excuses for late payment" while measures to tackle frivolous disputes, where customers wait until the deadline to claim problems with invoices, were also in the works.
Beyond cash flow, the small business plan has delivered business rate cuts for smaller retail, hospitality and leisure firms, with incoming Prime Minister Andy Burnham signalling he intends to go further.
The Minister outlined a vision for high street transformation. He said the Pride in Place funding is converting "low-quality rented properties above shops" into attractive apartments, while a crackdown on "bogus shops" – businesses that fold, restart and avoid tax – aims to restore fair competition and consumer confidence.
The Post Office, he revealed, is developing a new model to become a hub for online retailers seeking high street presence and for government services, driving footfall back to town centres.
He said:
"The high street has to evolve and reinvent itself, and it's entrepreneurs that will do that, not government. But we've got to make it easier for that to happen."
Yet for all the progress, he acknowledged the psychological toll of a brutal decade on Britain's business owners.
"It's been such a tough decade for small businesses. It's made small businesses resilient, but it's also made them risk-averse," he observed. "I think we need to speak a language which recognises that."
His answer is to reframe risk. Export support, for example, is being positioned not just as a growth strategy but as resilience-building, spreading businesses across different markets to protect against domestic shocks.
The Business Growth Service now provides a single portal for government advice, ending what he called the experience of being "the small entrepreneur with 20 tabs open in your browser as you desperately try to find the right bit of government."
Support is being channelled through community development finance institutions (CDFIs) where lending and advice go "hand in hand."
On artificial intelligence, where Enterprise Nation research found only one in five small firms using the technology regularly, the minister was candid about the challenge for small firms.
"It feels like they're being expected to become experts in something which changes every two months," he said, acknowledging that AI models evolve "every few weeks".
Roundtables with major tech providers at Number 10 are working toward a "curated set of support" by summer's end. The goal is to shift the paradigm from learning AI yourself to finding the right support, as businesses already do with accountants and lawyers.
"We've got to make finding that easier and a little less daunting so that people can go a bit deeper and unlock the transformational change that's there," he said.
On youth entrepreneurship, the minister said Start Up Loans have been significantly expanded, with "a huge proportion" flowing to young founders.
He hinted at forthcoming announcements tied to the Melbourne Review, which is examining how to support young people not in education, employment or training or NEETs. Helping them start businesses, he suggested, would be "part of the answer" when findings are released this summer.
Research published this spring with CIFP found that improving "finance readiness" among small firms could unlock an estimated £5 billion in additional lending annually.
The minister said the government was addressing all three sides of the financing triangle: supply, readiness and demand.
"Supply is only one side of it," he acknowledged. "Readiness is really important. The other thing is demand."
That means recognising that many business owners, scarred by repeated crises, need reassurance as much as capital.
Getting paid on time: Late payment has been one of the biggest frustrations our members have raised for years, and legislation is finally in Parliament.
The Small Business Protections Bill caps the payment terms large firms can impose on smaller suppliers at 60 days, makes interest on late payments mandatory at 8% above the Bank of England base rate, and gives the Small Business Commissioner the power to fine persistent late payers.
The Commissioner recovered over £1.5 million for small businesses last year, more than the previous four years combined.
Your rates bill: Permanently lower multipliers for retail, hospitality and leisure premises with rateable values under £500,000 came in this April, benefiting over 750,000 properties.
Opening a second premises now comes with an extra two years of Small Business Rates Relief, and pubs received a rates cut with a two-year real-terms freeze to follow.
Finding finance: The British Business Bank's capacity has grown to £25.6 billion. Growth Guarantee Scheme loans of up to £1.1 million can now run for up to 10 years, and Start Up Loans made 9,551 loans between August 2025 and May 2026, with eligibility widened to businesses trading for up to five years.
Everyday costs: The Employment Allowance doubled to £10,500, softening the impact of higher employer National Insurance for the smallest employers, and the 5p fuel duty cut was extended to the end of the year.
Taking someone on: The new Youth Jobs Grant pays £3,000 for every eligible young person a business hires, with more apprenticeship support arriving over the coming months.
Finding support: The Business Growth Service launched as a single front door to national, local and export support, and more than 750,000 users have visited business.gov.uk since launch.
Pubs and licensed venues can also stay open after midnight for Home Nations games in the later stages of this summer's World Cup.
August: Apprenticeship training becomes free for small employers taking on 16 to 24-year-olds, and the Small Business Regulatory Taskforce publishes its recommendations on cutting red tape.
September: Government departments publish their annual progress against SME procurement spending targets, and two new British Business Bank funds launch for the South East and East of England, totalling £350 million.
October: A new £2,000 payment opens for small employers who take on a 16 to 24-year-old apprentice.
October to November: The e-invoicing roadmap is published, setting out the path to all VAT invoices being electronic from April 2029.
April 2027 and 2028: Making Tax Digital for Income Tax, which already applies to those with self-employment or property income over £50,000, extends to those over £30,000 and then £20,000.
Early 2027: the Small Business Protections Bill is expected to become law.
Enterprise Nation works in partnership with the Department for Business and Trade on the Backing Your Business campaign, runs the Supply Connect procurement programme linking small firms to major buyers, and sits on the Minister's Small Business Growth Forum and regulatory task force.
The organisation's Startup Ambition Report tracks entrepreneurial sentiment across the UK.
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