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How SMEs can manage delays in receiving state cash support

The situation for small businesses is extremely difficult. Money is being made available through various schemes but the process of receiving this capital is proving slow. Alternative finance can help these firms bridge the gap.

While the likes of the Coronavirus Business Interruption Loan Scheme (CBILS) and the Coronavirus Job Retention Scheme, which has been extended to the end of June, are offering much needed financial support to cash-strapped small businesses, the money isn’t moving quick enough.

According to UK Finance, just 21% of CBILS applications have been approved. The number of applications that have been submitted stands at around 30,000, with a further 300,000 having made formal expressions of interest.

Recent comments from the governor of the Bank of England, in which he underlined the need for high street lenders to act quicker to process loans and suggested that the government underwrite 100% of the loans, are an indicator of the urgency surrounding the situation.

So, while the distribution processes connected to the government’s various support schemes may speed up in the future, right now, the delay in receiving this capital is a major problem for small business owners.

How can they overcome this funding challenge and secure money that is critical to their survival? Alternative finance can help.

Alternative finance is already part of the government’s emergency support measures, most notably as a constituent of the CBILS, and this is for a good reason: it offers some clear benefits for small business owners.

In the wake of prolonged caution from traditional lenders, alternative finance facilities such as invoice finance, asset finance, peer-to-peer lending and crowdfunding are proving 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 survive and grow.

This is how a small business in Sussex used peer-to-peer lending, through a commercial finance broker that specialises in alternative finance, to raise the capital for new resources.

SMEs are under an incredible amount of pressure and for many, their survival depends on quick access to capital. This is why raising awareness of alternative finance is so important, not least as it can help owners keep their businesses afloat while they wait for state support to arrive.

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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