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How can SMEs fund growth as economic uncertainty bites?

As the start of Q3 draws near, there seems little prospect of any relief for struggling small businesses. In fact, conditions look set to worsen. So how can firms find the capital that they need to survive?

Small firm output, orders and optimism under threat

Recent articles on what lies ahead for small businesses in 2022 make for largely grim reading. According to a new CBI SME Trends survey, SME manufacturers are expecting output and new orders to decline over the next three months, following stagnation in both for the three months to July. The survey also reveals the continued deterioration of business optimism in the sector.

New figures from the Association of Chartered Certified Accountants paint a similar picture. According to the data, small businesses are scrapping hiring plans on a significant scale – just 12% of SMEs are currently looking to recruit new staff. Worryingly, the survey also reveals that 7% of SMEs believe that they will run out of money over the next 12 months.

This sentiment chimes with that of the findings of the Mastercard Strive Business Barometer released earlier in the summer. The report found that around 1.5 million SMEs are expecting to lose business in the next year.

Safeguarding cashflow and how alternative finance can help

While the news isn’t all bad for small businesses – there are pockets of growth – there is no getting away from the sombre outlook for the sector. Covid continues to be a drag on firms and the impact of the war in Ukraine and Brexit show no signs of easing.

So, looking ahead, as Q3 approaches, the ability to access capital to safeguard cashflow, to ensure survival and to fund growth will be more vital than ever. And this is where alternative finance comes in.

In the wake of prolonged caution from traditional lenders, which is an issue that has returned during the pandemic and amid challenging market conditions in 2022, 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. Notably, alternative lending has played a prominent role in the government’s headline emergency support schemes, including the Recovery Loan Scheme. This profile has helped cement the reputation of alternative finance in the business sector.

Surviving 2022 and SME finance options

These are incredibly challenging times for small businesses and the short-term forecasts suggest that the pressure is only going to build further. If firms are to going to stay afloat and move forward, managing cashflow is critical. This is why it is essential that owners are aware of all the finance options available to them, including the services of alternative lenders.

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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