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Today, around 99% of all businesses in the UK are classed as small and medium-sized enterprises (SMEs), employing around 61% of the private sector workforce.Yet, despite their critical role in the UK economy, many SMEs are struggling.
A recent study found the number of small businesses in the UK has dropped from 5.9 million in 2020 to 5.5 million today. Many businesses are feeling the squeeze from increased operating costs, slow revenue recovery and, crucially, the ongoing struggle to secure funding.
Addressing these funding challenges is essential to help SMEs to survive and grow, and fintech solutions are making a real impact in this space. PayPal, for example, has stepped in to address a £2.5 billion funding gap facing UK small businesses in the last 10 years through its PayPal Working Capital solution. With its agile approach, PayPal Working Capital offers SMEs a fast and flexible way to access the capital they need, based on their sales history.
 Traditional funding avenues can present roadblocks for small businesses
The UK’s traditional lending system can present challenges to smaller and newer businesses, with extensive documentation, lengthy approval times, and strict lending criteria creating barriers for SMEs. In April 2024, for example, the Treasury Committee reported that small businesses face ‘needlessly tougher’ conditions due to restrictive measures from banks and regulators, which can hold them back from securing essential funds.
The Federation of Small Businesses (FSB) has also voiced concerns over declining funding success rates. Prior to the pandemic, 65% of SMEs were able to secure funding, a figure that fell to 61% in 2023. As a result, businesses seeking reliable financing are increasingly turning to fintech options as a more accessible and adaptable alternative. In fact, according to research done by Sonovate in 2023, four in ten SMEs prefer fintech lenders over mainstream banks when seeking business finance.
 Fintech solutions provide SMEs with alternative funding options
From managing cash flow to purchasing inventory, investing in technology or upskilling staff, SMEs depend on financing to support their growth. Fortunately, fintech solutions, like PayPal Working Capital, present SMEs with alternative financing options that are easy to apply and manage.
SMEs need modern funding solutions suited to the realities of running a small business, and options such as PayPal Working Capital present an appealing alternative. Unlike traditional business loans from banks, PayPal Working Capital provides funding based on an SME’s PayPal sales history. This helps to enable businesses to borrow up to 35% of their annual PayPal sales without the need to demonstrate extensive financial forecasts. The application process is quick and straightforward, with funds available fast.
Moreover, with PayPal Working Capital small businesses choose the percentage of their PayPal sales that will go toward repaying the cash advance so it can be tailored to suit the business’ cash flow needs. Repayments are tied to daily sales, which means businesses pay more when they have high sales and less during slower periods. With a single fixed fee, business owners are freed from ongoing interest charges and have a clear view of total repayment costs, meaning no unwelcome surprises.
How can fintech solutions help your business to grow?
Since its inception in 2014, PayPal Working Capital has distributed £2.5 billion to 58,000 UK businesses across a variety of sectors. From fashion to auto-parts, these cash advances have allowed small businesses to flourish in today’s challenging economic landscape3. Nine out of 10 (91%) of these businesses have said their revenue either increased or remained steady thanks to the funding they received.
The London Candle Company is one of the businesses that has benefitted from PayPal Working Capital. A small business focused on selling high-quality, competitively priced candles in bulk to businesses in the catering and hospitality industry, The London Candle Company took advantage of PayPal Working Capital’s innovative approach to repayments.
“PayPal Working Capital has been so helpful when I’ve needed to stock up on bulk candles ahead of the busy winter months, especially because I need to pay my suppliers right away,” Founder and Managing Director, Jonathan Welland explains, “I’ve found it simple and easy to use too, as you choose the percentage of your sales that you pay towards the advance – you’ve still got cash flow coming in but you’re only losing a portion of it. And before I know it, it’s been paid.”
Small business owners across the UK, like Jonathan, are already making the most of fintech models, which are rapidly transforming the traditional lending industry. Could your business be next? Discover more information about PayPal Working Capital and empower the expansion of your business.
Any information provided is general only and does not take into account your objectives, financial situation or needs.
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How fintech financing is plugging the £2.5 billion funding gap for small businesses in the UK

The UK housing market showed unexpected resilience in October, with estate agents reporting increased sales, rising buyer inquiries, and a brighter outlook following the Autumn Budget.
Despite pre-budget apprehension, the housing market outperformed expectations, according to the latest survey by the Royal Institution of Chartered Surveyors (Rics). Of the 269 estate agents polled, a majority reported more sales in October compared to September, driven in part by buyers seeking to complete transactions ahead of potential budget-related tax changes.
While some agents observed a slowdown in the weeks leading up to the October 30 budget, the overall sentiment was optimistic. “We have had a wave of exchanges and completions, probably prompted by a desire to exchange before the budget,” said Simon Milledge of Jackson-Stops in Blandford Forum, Dorset.
Similarly, John King from Andrew Scott Robertson in Merton, southwest London, attributed October’s surge in activity to a combination of media coverage on potential tax rises and easing mortgage rates.
Ian Perry of Perry Bishop in Cheltenham, Gloucestershire, noted: “[There was] a slight hiatus ahead of the budget but the market [is] now perking up again.”
Looking ahead, 34 per cent of estate agents anticipated selling more homes within three months, with even greater confidence about activity levels this time next year.
The survey also found a continued rise in buyer inquiries for the fourth consecutive month, alongside an increase in new listings, creating what the Rics described as a “relatively solid” near-term pipeline. Reflecting this recovery, 16 per cent of respondents believed house prices were rising, a significant shift from two months ago when prices were seen as static.
Tarrant Parsons, head of market analysis at the Rics, highlighted the momentum: “The recent improvement in buyer demand is translating into growth in the number of sales being agreed. Forward-looking sentiment points to this brighter trend continuing in the months ahead.”
However, he warned that a post-budget rise in bond yields, which influence mortgage rates, could pose challenges in the short term.
In the lettings market, tenant demand remained robust over the summer, but supply constraints intensified. A net 29 per cent of letting agents reported a decline in landlord instructions, marking the most negative reading since late 2021.
With rental homes in short supply, most agents expected rents—already at record highs—to continue climbing, further squeezing tenants in a highly competitive market.
Read more:
Housing market rebounds after budget as buyer demand surges

UK export growth could shrink by up to £8.5 billion over two years if a full-scale US-China trade war erupts, Allianz Trade has warned.
A protracted trade conflict between the world’s two largest economies could severely impact the UK’s manufacturing sector, according to Allianz Trade, the trade credit division of the global insurance and investment manager Allianz, formerly known as Euler Hermes.
The organisation cautioned that an escalation of US tariffs on China to 60 per cent for all goods—both critical and non-critical—and 10 per cent for imports from the rest of the world could result in significant economic fallout. However, Allianz Trade described such a scenario as “unlikely,” highlighting the detrimental effects on the US economy itself, including a projected 1.2 percentage point hit to GDP growth and a 0.6 percentage point rise in inflation by 2026.
Global trade would also feel the pinch, with growth potentially slowing by 2.4 percentage points under the maximum-tariff scenario.
A more moderate tariff increase—raising existing US tariffs on Chinese imports from 13 per cent to 25 per cent and introducing smaller hikes of 5 per cent for imports from other countries (excluding Mexico and Canada)—could still hinder UK export growth by approximately £2.2 billion over two years. It would also reduce global trade growth by 0.6 percentage points, Allianz Trade noted.
Capital Economics offered a more optimistic view, arguing that the UK’s direct exposure to potential Trump-era tariffs would be limited. Unlike China, Mexico, or the European Union, the UK does not run a significant trade surplus in goods with the US. Trade in goods between the two nations is broadly balanced, with the UK’s services exports—twice the value of its goods exports—unlikely to be affected by tariffs.
Capital Economics estimated that a hypothetical 10 per cent tariff on all UK goods exported to the US would result in a negligible impact on UK GDP, ranging from -0.1 per cent to +0.1 per cent. This is due to the likely exemption of services exports and the offsetting effect of a weaker pound, which would make UK goods more competitively priced in US markets.
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US-China trade war risks wiping £8.5bn from UK exports, warns Allianz Trade

Meta Platforms has been fined €797.72 million (£663 million) by the European Commission over alleged anti-competitive practices involving Facebook Marketplace.
The European Union regulator ruled that Meta breached competition laws by linking its social network with Facebook Marketplace, giving it an unfair advantage over rival online classified services.
Margrethe Vestager, the European Commission’s executive vice-president for competition policy, stated that Meta’s actions provided the company “advantages that other online classified ads service providers could not match,” deeming it illegal under EU antitrust regulations. “Meta must now stop this behaviour,” Vestager said.
Meta has announced plans to appeal the decision. The company, which also owns Instagram and WhatsApp, claimed the ruling fails to prove “competitive harm” to its rivals or consumers and “ignores the realities of the thriving European market for online classified listing services.” Meta argued that many Facebook users choose not to engage with Marketplace, highlighting that it remains an optional feature.
Facebook launched its Marketplace platform in 2016 and expanded it across Europe a year later. The European Commission initiated its investigation into Meta’s practices in 2021. Under EU antitrust rules, companies found in violation risk fines of up to 10% of their global revenue.
The ruling is part of an ongoing regulatory clampdown on Meta within the EU. Last year, the company faced a record €1.2 billion fine for breaching EU data privacy regulations. Ireland’s Data Protection Commission found that Meta failed to adequately protect European users’ data when transferring it to the United States, where it was exposed to surveillance by U.S. authorities. Meta’s European operations are headquartered in Dublin.
In the United States, Meta is also under scrutiny. The Federal Trade Commission has sued the company over its acquisitions of Instagram and WhatsApp, alleging they were intended to eliminate competition. Meta has defended these acquisitions, asserting they have “benefited competition and consumers alike.”
As the EU continues to tighten its grip on major technology firms, Meta has delayed the release of its latest AI model in Europe, attributing the delay to “unpredictable” regulatory conditions. This latest antitrust fine underscores the European Union’s increasing resolve to regulate the market dominance of US-based tech giants.
Meanwhile, changes to the EU’s approach could be on the horizon as Margrethe Vestager, who has championed significant fines against US tech firms, prepares to step down as competition commissioner. She is expected to be succeeded by Teresa Ribera, Spain’s environment minister, who is anticipated to balance oversight of technology companies with support for European businesses.
Read more:
Meta hit with €800m fine by EU for antitrust breach in Facebook Marketplace case

The Bank of England’s ability to set effective interest rates is being hindered by unreliable labour market statistics, according to governor Andrew Bailey, who has highlighted the shortage of accurate data on the UK’s workforce as a “substantial problem.”
Speaking at Mansion House to an audience of City financiers, Bailey voiced his concerns over the Office for National Statistics’ (ONS) failure to obtain sufficient responses for its Labour Force Survey, which has plagued data collection for the past 18 months. This lack of reliable information on employment status has forced the Bank to lean on alternative data measures as it navigates crucial monetary policy decisions.
“Labour Force Survey challenges are widely recognised,” Bailey commented. “It’s a substantial issue – not just for monetary policy – when we lack clear insight into workforce participation. We could certainly benefit from more engagement across the UK with ONS survey efforts.”
Bailey’s remarks underscore his growing frustration with the UK’s inability to maintain robust workforce data. He highlighted that, alongside the Treasury and other key stakeholders, the Bank continues to work closely with the ONS to improve the quality of UK labour data.
While other advanced economies have seen labour market re-entry post-pandemic, the UK has struggled with a decline in labour force participation, a trend Bailey warns could hamper economic performance. The ONS has attempted to address the issue by increasing its survey participants from 44,000 in 2022 to 59,000 this year, though it has cautioned users against relying too heavily on short-term Labour Force Survey data for decision-making.
Bailey emphasised that understanding labour supply dynamics is essential for gauging the UK’s overall economic capacity, which has been further pressured by Brexit-related trade restrictions, energy price shocks, and sluggish investment.
Investment boost for UK economy through isa reform proposed by lord mayor
At the same Mansion House event, Alastair King, lord mayor of London, proposed reforms to the UK’s Individual Savings Accounts (Isas) that would encourage investment in domestic assets. King urged the government to incentivise investors, suggesting that full tax relief could be contingent on funds directed towards UK-focused investments.
“Redirecting funds from non-productive to productive assets could scale up British firms, enhance returns for savers, and broaden market participation,” King stated. His proposal, which he argued would not require additional government funding, aims to align UK practices with those of international counterparts.
Read more:
Bank of England governor highlights ‘substantial problem’ with UK labour data accuracy in Mansion House speech

The Post Office has announced potential closures of 115 Crown Post Office branches, placing up to 1,000 jobs at risk in a significant restructuring aimed at reducing losses.
The proposed changes may lead to franchise arrangements with third-party operators like WHSmith taking over affected branches. However, this shake-up has drawn sharp criticism from unions and community advocates.
The Communication Workers Union (CWU) condemned the timing, as the move coincides with the ongoing Horizon IT scandal inquiry, labelling it “immoral” and “tone deaf.” The Horizon scandal, in which hundreds of sub-postmasters were wrongly prosecuted due to faulty software, remains fresh in the public memory, with many calling for transparency and justice.
Under new chairman Nigel Railton, the Post Office aims to put the organisation on a more sustainable financial footing amidst challenges like competition from parcel operators and declining letter revenues. Losses reached £81 million in the 2022-23 financial year, with nearly half of its branches operating at minimal or negative profitability.
Railton emphasised the need for a “fresh start,” with plans to invest £250 million annually in the network by 2030, contingent on government support. This includes an improved banking offer and a modern, “lower-risk” IT system, addressing long-standing technology issues. Railton described the process as “right-sizing” the organisation to better meet future demands.
Growing Community Dependence on the Post Office
With bank branch closures escalating across the UK, Post Offices have become essential for cash and banking services in local communities. The closures, if they proceed, will disproportionately impact rural and urban communities where alternatives are limited. In July alone, over £3.7 billion was withdrawn or deposited at Post Offices, highlighting their critical role.
Community advocates, like Martin Quinn from *Campaign for Cash*, argue that the government should treat the Post Office network as essential infrastructure. “This is another nail in the coffin for communities that rely on the Post Office for cash access,” he warned, urging the government to halt the closures.
The government has been in “positive” discussions with Railton, with Business Secretary Jonathan Reynolds suggesting that Post Office branches could step in to fill gaps left by bank closures. However, with the rapid rise of digital banking, the viability of a high-street-based strategy remains uncertain.
Separately, ministers are considering transferring Post Office ownership to sub-postmasters to protect local services. A government spokesperson stated, “We are in active discussions with Nigel Railton to strengthen the network for a sustainable future.”
Impact on Jobs and Local Services
The proposed closure list includes branches across the UK, from major city centres to rural areas, affecting towns such as Glasgow, Oxford, London Bridge, and Stornoway. The Post Office has stressed it does not plan to reduce its total network of over 8,500 independently run branches. However, CWU officials argue that this move risks further alienating communities dependent on the Post Office network.
Here is a full list of the branches affected by the Post Office’s closure plans:
Antrim
Bangor
Belfast City
Edinburgh City
Glasgow
Haddington
Inverness
Kirkwall
Londonderry
Newtownards
Saltcoats
Springburn Way
Stornoway
Wester Hailes
Barnes Green
Bransholme
Bridlington
Chester Le Street
Crossgates
Eccles
Furness House
Grimsby
Hyde
Kendal
Manchester
Morecambe
Morley
Poulton Le Fylde
Prestwich
Rotherham
Salford City
Sheffield City
South Shields
St Johns
Sunderland City
The Markets
Birmingham
Breck Road
Caernarfon
Didsbury Village
Harlesden
Kettering
Kingsbury
Leigh
Leighton Buzzard
Matlock
Milton Keynes
Northolt
Old Swan
Oswestry
Oxford
Redditch
Southall
St Peters Street
Stamford
Stockport
Wealdstone
Barnet
Cambridge City
Canning Town
Cricklewood
Dereham
Golders Green
Hampstead
Harold Hill
Kilburn
Kingsland High Street
Lower Edmonton
Roman Road
South Ockendon
Stamford Hill
Bideford
Dunraven Place
Gloucester
Liskeard
Merthyr Tydfil
Mutley
Nailsea
Newquay
Paignton
Port Talbot
Stroud
Teignmouth
Yate Sodbury
Baker Street
Bexhill On Sea
Cosham
Great Portland Street
Croydon High Street (10)
Kensington
Knightsbridge
Melville Road
Paddington Quay
Portsmouth
Raynes Park
Romsey
Westbourne
Windsor
Worlds End
Aldwych
Brixton
Broadway
City of London
Clapham Common
East Dulwich
Eccleston Street
High Holborn
Houndsditch
Islington
Kennington Park
London Bridge
Lupus Street
Mount Pleasant
Vauxhall Bridge Road
Read more:
Post Office faces backlash over potential closure of 115 branches as jobs and services are at risk

HMRC will reduce the interest rate it charges on late tax payments to 7.25% from 18th November, following the recent cut in the Bank of England’s base rate.
However, this reduction highlights a stark disparity: taxpayers will receive only 3.75% interest on tax refunds, leaving a 3.5% gap in favour of HMRC.
The revised interest rates apply to new tax debts and quarterly instalment taxpayers from 18th November and will be effective from 26th November for those on non-quarterly plans. While any reduction in interest charges may sound beneficial, tax insurance specialist Qdos warns that the focus should remain on meeting the 31st January self-assessment deadline to avoid late payment penalties.
Seb Maley, CEO of Qdos, voiced concerns over the interest rate difference, stating, “The real talking point here – the elephant in the room – is the difference between the interest rate HMRC charges on late payments and the rate it offers on refunds. While this approach may align with practices of other tax authorities, it feels particularly unfair to the self-employed, who are often disproportionately impacted.”
With January’s self-assessment deadline approaching, taxpayers are reminded to prioritise timely compliance to avoid the 7.25% late payment interest rate and additional penalties. Taxpayers awaiting refunds, however, may see a reduced rate of 3.75% – a disparity that raises questions about fairness in the system.
Maley added, “More than ever, self-employed individuals need to be vigilant about tax compliance, as late payments can come at a high cost. HMRC’s higher charges on late payments compared to refunds remain a contentious issue that deserves further scrutiny.”
As the self-assessment deadline nears, taxpayers are encouraged to take all necessary steps to ensure timely payments, avoiding potential penalties in an economic climate where every percentage point matters.
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HMRC’s lower interest rate on late payments overshadows refund disparity

Barclays has introduced the Business Prosperity Index, a new quarterly report offering a detailed view of UK business performance and growth opportunities.
Created with the Centre for Economics and Business Research (Cebr), the index combines data from over one million Barclays business clients—including lending, cash flow, and international payments data—and survey insights from 1,000 business leaders, providing a comprehensive gauge of business sentiment.
The inaugural Q3 findings reveal that UK businesses are increasingly confident about growth, with planned investment in Q3 rising by 1.4% year-on-year. Post-Budget, nearly half (46%) of businesses have resumed previously paused investment plans, and 37% are more likely to seek additional funding. To support this ambition, Barclays has launched the Business Prosperity Fund, a £22bn fund designed to aid UK businesses in accessing finance for expansion, available to both new and existing Business Banking and UK Corporate Banking clients.
Matt Hammerstein, CEO of Barclays UK Corporate Banking, expressed cautious optimism: “Our data shows many businesses are ready to kick-start growth by seeking the funding they need. The availability of our £22bn Prosperity Fund will support business investment and help drive economic prosperity.”
Investment Appetite and Challenges
The Q3 survey highlights financial resilience and a strong appetite for investment, with the primary focus on staff training (44%) and R&D (35%). Despite ongoing pressures, 61% of business leaders expressed confidence in the UK economy’s direction. Improved cash flow across Barclays’ business accounts reflects this resilience, with net cash flow increasing by 17% year-on-year as businesses manage outflows effectively.
However, workforce shortages remain a critical challenge, with 62% of businesses citing skilled labour shortages. The issue is most pronounced in Scotland (92%), Yorkshire and the Humber (90%), and the West Midlands (88%). Nearly half of surveyed firms aim to invest in headcount growth, and many are prioritising training to counteract the skills gap.
Post-Inflation Pricing Pressures
While inflation has peaked, high production costs persist, leading businesses to adapt strategies to retain customers amid rising costs. Over half (52%) of firms plan to expand product offerings, despite rising costs, and 65% have introduced pricing adjustments, special offers, or reduced sizes (shrinkflation) to remain competitive.
Hannah Bernard, Head of Barclays Business Banking, noted the significance of the new index as a tool for business leaders and policymakers: “The Business Prosperity Index is designed to be a bellwether for business sentiment, helping businesses navigate the economic landscape and ensuring access to the resources needed for growth.”
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Barclays launches £22bn fund and new business prosperity index to support UK business growth

Entrepreneur and Aston University alumna Dr Isabella Moore CBE is challenging stereotypes about older adults in business, advocating for the transformative power of later-life entrepreneurship to boost health, confidence, and mental well-being.
Prominent businesswoman and founder of the Olderpreneur Alliance, Dr Moore shared her insights on The Healthy Work Podcast with Dr Simon McCabe, where she highlighted the unique advantages older adults bring to the entrepreneurial world.
Drawing on her Aston University research, Dr Moore argues that older adults possess valuable “age capital”—the resilience, skills, and adaptability built over a lifetime—that make them well-suited to entrepreneurship. Her Later-Creator programme, designed to foster confidence and resilience among mature entrepreneurs, aims to support those looking to embark on new ventures after retirement.
“Many individuals I spoke with were worried about losing cognitive abilities in retirement, particularly those with family histories of dementia,” Dr Moore said. “They sought the mental challenge of running a business to stay sharp.”
For many, later-life entrepreneurship is not just about financial gain but also a means to stay mentally active, preserve identity, and contribute meaningfully. Dr Moore noted that societal expectations often discourage older adults, particularly women, from exploring business opportunities. “Many women internalise the idea that they should focus on grandchildren or caregiving rather than business, while men feel pressured to ‘slow down,’” she observed.
Dr Moore advocates for an age-friendly business environment, urging employers, policymakers, and the media to recognise older adults as valuable contributors to the entrepreneurial landscape. Tailored support, she says, is key for older entrepreneurs, addressing life stages, family responsibilities, and the unique expertise they bring.
Dr Simon McCabe, head of the Healthy Work Research Group at Aston Business School, praised Dr Moore’s work, noting that “age capital” offers older entrepreneurs credibility and confidence. “Keeping both physical and mental well-being in check is foundational to navigating the entrepreneurial journey and building resilience,” he added, urging older adults not to let ageist stereotypes hold them back.
As interest in mature entrepreneurship grows, Dr Moore’s work continues to challenge perceptions, opening up new opportunities for older adults to thrive in business and achieve greater well-being.
Read more:
Older adults can thrive as entrepreneurs, says expert