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Slipped through Covid-19 SME financial safety net? Read this

The government’s various emergency business support schemes are helping a great number of businesses, but there are some, including smaller firms, that have fallen through the cracks. How can they survive?

According to a new Treasury select committee report, millions of workers have been excluded from the coronavirus support schemes, such as the Coronavirus Business Interruption Loan Scheme, the Bounce Back Loan Scheme, the Coronavirus Job Retention Scheme and the Self-Employment Income Support Scheme.

Included in those that have slipped through the Covid-19 financial safety net are directors of limited companies and high-earning self-employed workers. The committee has lobbied for changes to the schemes to provide support to the businesses and individuals it feels have been unfairly left out, but the government has shown little inclination to extend its initiatives.

This leaves the companies and individuals identified by the committee in an extremely difficult position. As businesses slowly reopen and begin to target new growth, they must manage this critical step without the help provided by the government’s support schemes.

So, how can they afford the costs associated with restarting and generating new revenue? Not only are there socially distancing measures to consider, but businesses also the need to meet challenges relating to the surge in demand for online shopping and business services and a new wave of cyberattacks on vulnerable working-at-home employees.

Alternative finance can help.

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 maintaining cashflow and for essential investment. These facilities, which offer a more personalised approach to lending, are helping small businesses survive and target regrowth.

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 and the self-employed with loan, invoice finance and asset finance facilities. This profile is helping cement the reputation of alternative finance in the business sector.

Small businesses are facing unprecedented hardship: the impact of the pandemic has been huge and there seems to be little in the way of relief on the horizon – notably, the new year will make clear the impact of Brexit. As such, it is vital that business owners are aware of all the funding options available to them, including alternative finance.

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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