It never rains but it pours for small businesses. Just as a semblance of stability was taking hold, the economic landscape is changing again thanks to the Iran war. As the sands shift once more, how can firms access the cash to keep the wheels turning and fund essential investment?

What does the Iran war mean for small business finances in Q2?

With uncertainty the only certain thing about the Iran war, with little to suggest that the conflict is going to end any time soon, the impact on the small business sector is already beginning to show. While inflation is rising, growth forecasts for small business are starting to shrink.

Inflation jumped to 3.3% in March and the rate is expected to rise further going forward as the disruption caused by the Iran war continues, in particular in relation to the supply of fuel. There has already been a hike in petrol and diesel prices, affecting small businesses across the spectrum, while energy prices are also increasing.

The consequences for small firms are already evident. According to new research from Novuna Business Finance, the number of business owners predicting growth is at a 10-year low. Less than 30% of firms are predicting growth for the next quarter, with the usual seasonal uplift in outlook nowhere to be seen.

Over three quarters of owners fear the damage that the Iran war will do their business. The concern is most acute in the transport and distribution sector, with agriculture and manufacturing also at the top of the list. Businesses that are already having to manage pressures related to the war in Ukraine and US tariffs, now have a new source of stress to contend with.

How alternative finance can help with safeguarding cash flow

While small businesses are by now well versed in resilience, the fallout from the Iran war will be hugely challenging to manage. While owners must safeguard cash flow amid a fresh wave of rising prices and higher bills, they also have to find the capital for essential investment amid all the upheaval.

Access to finance is critical, and at a time when traditional banks are remaining cautious with regard to small business lending, this is where alternative finance can help.

In response to this squeeze, alternative finance has become into a vital lifeline. Solutions such as invoice finance, asset finance and peer-to-peer lending are filling the funding gap, offering speed, affordability and tailored support. These agile funding facilitates are helping small businesses survive and target stability and growth.

Small firm finance options for accessing capital for essential investment

In an already stressed climate, small businesses have been thrown yet another curve ball in the form of the Iran war and its impact on fuel prices and energy costs. Already far from straightforward, protecting cash flow and accessing capital for investment is set to become more challenging.

This is why it is critical that small business 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.