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The year ahead: SME funding options in 2021

It is no understatement to say that the year head is set to be one of the most important ever for small businesses. There is a need to survive and, hopefully, then thrive, and capital management will be critical. As such, owners need to be aware of all SME funding options.

It goes without saying that 2020 has been an extraordinary year. The impact of Covid-19 has tested small businesses to their very limits, with most exerting all their energies on adapting and surviving. The pressure has been immense but most firms have found a way to keep going.

And now, as 2021 approaches, there is a light at the end of tunnel for small businesses, with the prospect of widely available vaccines suggesting that lockdowns and operating restrictions may soon be a thing of the past. This time can’t come soon enough.

Planning for the post-Covid-era: getting there, recovery and regrowth

For all the optimism, we are not yet in the post-Covid era – it may be a matter of a few months or it may be a little longer, but for now businesses are still in survival mode. However, at the same time, firms need to be thinking ahead and planning for more normalised market conditions.

The government’s emergency business support schemes, including the Coronavirus Job Retention Scheme, the Coronavirus Business Interruption Loan Scheme and Self-Employed Income Support Scheme, are playing a key role in helping small businesses keep their doors open, but these facilities will be closed at some point in 2021 and businesses will have to stand on their own two feet again.

This is why forward planning and an awareness of all SME funding options is so important. As the government’s financial support for businesses and workers is gradually withdrawn, smaller firms will need to focus their attention on the SME finance facilities that are available, from the services of traditional lenders to alternative finance products.

Funding recovery and how alternative lending can help

With regard to the services of alternative lenders, in the wake of prolonged caution from traditional lenders, which is an issue that has again become acute in Covid-19 times, 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.

Tellingly, alternative finance is playing a key role in the government’s Covid-19 business support strategy, in particular with regard to the Coronavirus Business Interruption Loan Scheme, which offers access to a range of finance facilities, including alternative finance services.

What firms need to know about SME funding in 2021

These are not easy times for small businesses – the end of the Covid-era is tantalising close, but there are still a few more months to be survived. And then comes the fight to recover and regrow. To achieve these goals in 2021, it is vital that firms have knowledge of the all funding options open to them, from the government’s emergency business loan schemes to the services of alternative lenders.

To find out more about A&T Business Associates services, contact Steve Bowles on 01903 602211 or steve.bowles@atbusinessassociates.co.uk.

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