There is light at the end of the tunnel for small businesses – it looks likely that market conditions will be more normal in 2021. But the next few months, or more, still have to be survived and the big question is, how can these firms do it?

As expected, the winter has brought tough conditions and tougher decisions for small businesses, not least with regard to the impact of a second lockdown on footfall, on revenues and on workforces. While it seems that lessons have been learned from the first lockdown and that many businesses are better prepared, conditions remain difficult, extraordinarily so.

The months ahead and awareness of all funding options

In the face of the ongoing impact of the coronavirus pandemic, the government is continuing to make emergency business funding available. Notably, the furlough scheme and the Coronavirus Business Interruption Loan Scheme have been extended, until the end of March and the end of January, respectively.

In addition, there are specific schemes in operation for small businesses, such as the £12 million Supplier Skills Programme for selected firms and the Self-Employment Income Support Scheme, which has been extended until April 2021.

However, small business owners need to be aware of all the funding options available if they are going to survive until a vaccine brings some degree of normality back to the marketplace. This is particularly true for firms that have been unable to access government financial aid.

For small businesses, the focus is both six months down the line and now. With regard to the latter, for many firms, the Christmas period is vital – consumer spending is expected to reach over £3.5 billion – not least given the importance of seasonal revenue to surviving the beginning of the new year.

Small businesses still have a lot to do to ensure that they will be around for the start of the post-Covid era. This is why awareness of all funding options is important, from government emergency support schemes to the services of alternative lenders.

The next 6 months: how alternative finance can help

With regard to alternative lenders, in the wake of prolonged caution from traditional lenders, which is an issue that has reared its head again during the coronavirus pandemic, alternative finance 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 maintaining cashflow and for essential investment.

These facilities, which offer a more personalised approach to lending, are helping small businesses survive and target regrowth. Notably, alternative lending is playing a prominent role in the government emergency support schemes, in particular the Coronavirus Business Interruption Loan Scheme, which is connecting firms and the self-employed with loan, invoice finance and asset finance facilities. This profile is helping cement the reputation of alternative finance in the business sector.

What SMEs need to know about finance options

There is real hope now that the marketplace will return to some kind of normal in 2021 and that small businesses can consign Covid-19 restrictions to the past. But the next six months still have to be managed and knowledge of all funding options, including alternative finance, will be crucial to achieving this goal.

To find out more about A&T Business Associates services, contact Tony Hedger on 01903 602211 or tony.hedger@atbusinessassociates.co.uk.