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How small businesses can fund post-Covid-19 e-commerce needs

E-commerce is going to play a critical role in how the post-Covid-19 marketplace looks. As a result, small businesses are under pressure to build new online platforms or upgrade existing ones. However, with capital sparse, how are they going to afford it?

How the pandemic is redrawing the e-commerce marketplace

The Covid-19 pandemic has reframed the relationship consumers and small business owners have with e-commerce. The former have been forced to take their engagement to another level, and for the latter, the migration from bricks-and-mortar retail to e-commerce has accelerated to a point where e-commerce will have a major influence on who makes it in the new business world and who doesn’t.

For example, according to data from the latest British Retail Consortium-KPMG Retail Sales Monitor, online non-food sales increased by 58% in April, compared to 4% for the same month in 2019. It also revealed that the “non-food online penetration rate” was 70% for April, a dramatic increase over the 30% recorded for April of last year.

And then there’s the launch of Facebook Shops, which is a new e-commerce service aimed primarily at small firms and brands. If the importance of e-commerce needed underlining any further, this is all the evidence we need.

What the new e-commerce era means for small firms

Looking ahead, as restrictions are gradually eased and shops, cafes, restaurants and other small businesses reopen, these growth rates are likely to slow. However, the use of e-commerce will remain much higher than in pre-pandemic times and accessing this newly expanded marketplace will be key to the future of many small businesses.

As such, to put themselves in a position to target this revenue stream and take advantage of new opportunities, a lot of small business owners are going to have to remodel how they sell their products and services. The challenge will be raising the capital to achieve this goal.

Financing investment in e-commerce and how alternative lenders can help

Small businesses are fighting for their lives and there is little if any spare cash to fund investment in e-commerce platforms, whether new or enhanced. This is why is it vital that when the government support schemes come to an end, owners are aware of all the funding options available to them, including alternative finance.

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.

Notably, alternative lending is playing a prominent role in the government emergency support schemes, in particular the Coronavirus Business Interruption Loan Scheme, which is connecting firms with loan, invoice finance and asset finance facilities. This profile is helping cement the reputation of alternative finance in the business sector.

The pandemic has ushered in a game-changing shift in consumer habits and it has given the e-commerce market a vastly larger role. Going forward, small businesses can’t afford not to have a presence. Alternative lenders can help owners fund the investment they need.

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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