In 2021, it has been more important than ever for small business owners to be aware of all the finance options available to them, as they have battled uncertain market conditions, fragile economic recovery and continued pressure on cashflow.

It is not an understatement to say that 2021 has been another extraordinary year for small businesses, with developments framed primarily by the ongoing impact of COVID-19 and the country’s non-EU status. As the government’s roll-out of plan B shows, at a critical period for businesses, it is churlish to think that the pandemic and its effect on key markets is in the past.

Notably, it is clear that supply-chain problems are here to stay, in the short term at least, with this disruption having a knock-on impact on raw material prices, which have risen sharply in the last quarter of the year. At the same time, a steep hike in energy prices is also putting extra pressure on cashflow.

Accessing finance key to managing macro and micro cashflow pressures

In addition to these macro headwinds, small businesses have also had to find the money to invest in technology, from e-commerce platforms to the digitalisation of supply chain management, that is proving essential to survival in a pandemic-framed marketplace. At the same time, it has been important for these firms to strengthen cyber-security systems as the need to work from home on a large scale, among other reasons, has made them more vulnerable to cyber-attacks.

Other areas of critical development include sustainability, in particular the contribution of small businesses to achieving larger net zero goals, and staff wellbeing, both physical and mental, as employees have had to manage the impact of COVID-19 on work environments and working practices.

In short, the small businesses sector has had to survive the toughest of market conditions, for a second year in a row, and accessing finance services and lending facilities, from traditional institutions and government emergency schemes to the services of alternative finance providers, has been critical to this robustness and resilience.

Safeguarding cashflow and how alternative finance is helping

With regard to alternative finance, in the wake of prolonged caution from traditional lenders, which is an issue that has returned during the pandemic, services such as invoice finance, asset finance and peer-to-peer lending, are proving a vital source of capital for small businesses, both for maintaining cashflow and for essential investment.

These facilities, which offer a more easily accessible and personalised approach to lending, are helping small businesses survive and target recovery and regrowth.

Furthermore, alternative lending is playing a prominent role in the government’s headline emergency support scheme, the Recovery Loan Scheme (open now until the end of June 2022). Invoice finance and asset finance between £1,000 and £10 million per business are available under the initiative. This profile is helping cement the reputation of alternative finance in the business sector.

Business planning and SME finance options

Small businesses have shown remarkable resilience and resolve in 2021, with accessing finance key to maintaining forward momentum, and these qualities will continue to be vital in 2022, not least as headwinds remain significant, COVID loan repayments are due and new business taxes are implemented. Against this backdrop, awareness of all the small business finance options available will remain critical.

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