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Need access to capital? Don’t forget alternative finance

Small business owners are working furiously to raise capital to help their companies stay afloat. As they do this, it is critical that they are aware of all the funding options available to them, including alternative finance.

Government measures to protect businesses hit by the coronavirus continue to evolve. The emergency package of measures, including the Coronavirus Business Interruption Loan Scheme and the Coronavirus Job Retention Scheme, is being rolled out and beefed up.

The Chancellor has also extended help to self-employed workers. According to the new plan, self-employed people will receive 80% of their earnings, up to a ceiling of £2,500 a month, for three months.

While there has been praise for the government’s actions, with the VAT holiday hailed as a lifeline by some, there has been criticism of measures. For example, the Coronavirus Business Interruption Loan Scheme is facing criticism over its eligibility criteria and the need for directors to sign personal guarantees. The government is being urged to act swiftly.

Notably, there have also been calls to delay the planned increase in the national living wage as a means of alleviating the pressure on businesses. At the same time, the government and the Bank of England are encouraging banks to offer more help to struggling businesses, including in the form of extending loans.

What is clear is that current market conditions are unprecedented. The response from the public and private sectors should be considered with this in mind. No doubt the make-up of support measures will continue to change in the coming days and weeks.

Nevertheless, the need to access funding is an urgent one for small business owners. As such, it is essential that they know about and make use of the financing measures and facilities that are available, from government emergency support to help from traditional lenders and the assistance that can be provided by alternative finance services.

Notably, as well as loans, the Coronavirus Business Interruption Loan Scheme is also offering access to asset finance and invoice finance, and there is good reason for this. In the wake of prolonged caution from traditional lenders, alternative finance facilities have emerged as a vital source of capital for small businesses, both for safeguarding cashflow and for essential investment. These facilities, which offer a more personalised approach to lending, are helping small businesses maintain forward momentum and grow.

These are unprecedented times for small businesses and the pressure on owners to maintain cashflow and safeguard jobs is extraordinary. As they fight to do so, it is vital that they are aware of all the support and services that are available, including alternative finance facilities.

To find out more about A&T Business Associates services, contact Tony Hedger on 01903 602211 or tony.hedger@atbusinessassociates.co.uk.

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