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Accessing capital in 2023 and the role of alternative lenders

As an eventful 2022 draws to close, there seems to be little in the way of respite ahead for small businesses – another challenging year awaits. Given the outlook, accessing capital to safeguard cashflow and fund development will be critical, to both survival and growth.

Where investment is needed and the barriers to growth

Looking ahead, many of the key investment areas for small firms will remain the same in 2023, as will, unfortunately, the headwinds that will make funding development in these areas far from straightforward.

Small business owners will have to find a way to drive progress in areas such as net-zero planning, cybersecurity, staff wellbeing and digital tech (not to mention in relation to talent recruitment and retention), while continuing to deal with the impact of the war in Ukraine and Brexit on energy costs, market viability and profit margins.

In addition, the disruption to supply chains and the availability and prices of raw materials caused by Covid-19 is predicted to continue and many commentators are forecasting a deep economic recession, which is likely to have a significant impact on spending power.

Then there is the prospect of further political upheaval. The chaos in government witnessed in recent months has generated an almost unprecedented level of uncertainty and has directly worsened conditions for small businesses. While there is at last a semblance of stability, it would be foolish to rule out further turmoil in 2023.

At the same time, the issue of late payment isn’t going anywhere fast. The decision by the government to launch a review into the longstanding problem is welcome news, but the announcement is unlikely to have stirred much optimism among business owners, who can point to years of rhetoric on the subject but very little in the way of meaningful action.

Survival, stability and growth and alternative finance

Despite the dark clouds, there will be growth and success stories in 2023, and firms that are able to access funding quickly and affordably are likely to become among those telling them. This is why alternative finance will only grow in importance in the 12 months ahead.

In the wake of prolonged caution from traditional lenders, which is an issue that has returned during the pandemic and amid challenging market conditions, services such as invoice finance, asset finance and peer-to-peer lending are proving a vital source of capital for small businesses, not least because these facilities offer a more easily accessible and personalised approach to lending.

The prominent inclusion of alternative lending in the government’s headline emergency support schemes, including the Recovery Loan Scheme, has helped cement the reputation of alternative finance in the business sector in 2022.

Small business lending and clear planning for 2023

The ability of small businesses to access capital has always been critical, in particular in straitened times. Looking forward to 2023 and the conditions expected, it will be more important than ever. This outlook that makes awareness of alternative finance services absolutely essential.

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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