While an end to Covid-19 is seemingly in sight, in the shape of mass vaccination, small businesses remain in a battle for survival. How can they afford to make it out the other side of the new lockdown? Awareness of all the available funding options is critical.

The arrival of a second national lockdown is hardly a surprise but it’s still a blow for small businesses. All eyes are on the vaccination programme and the impact it will have on infection rates and government policy, but for now, firms will have to operate under Covid-19 restrictions until March. For many, this means the closure of physical stores and premises.

Surviving until spring: digital, wellbeing and more

The focus is firmly on surviving under lockdown conditions until the spring. Companies now have to refresh and renew lockdown operating strategies, identifying ways of maintaining revenue and managing cashflow in the coming weeks and months.

For a greater number of the smaller businesses, survival will involve strengthening digitalisation strategies, whether it’s the use of digital tech or the optimisation of digital profiles and services, such as e-commerce sites and customer communication strategies. This will need investment.

Another area in which small businesses will have to invest is employee wellbeing. Whether staff are working on-site or at home, looking after their physical and mental health makes good business sense – survival and regrowth needs a healthy, active workforce.

How small businesses can afford to invest and survive

Getting through the latest lockdown will undoubtedly push many small firms to their very limits. While there are steps that can be taken to target revenue and safeguard capital, a major barrier to making these investments is cost.

So, how can small businesses afford to survive?

Knowledge of all funding options is crucial. The announcement of a new emergency business support plan – the one-off £9,000 grant for firms in selected sectors – is a positive development. The government has also indicated their will make additional help available for companies that are not covered by this new package.

Furthermore, it is important that businesses make full use of existing schemes, such as the Coronavirus Business Interruption Loan Scheme and the Coronavirus Job Retention Scheme, which are still operating (the former has been extended to the end of April).

Alternative lending and funding during the winter lockdown

In addition to the government’s support schemes and mainstream small business finance facilities, there are the services of alternative lenders.

In the wake of prolonged caution from traditional lenders, which is an issue that has again become acute in Covid-19 times, 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 safeguarding cashflow and for essential investment. These facilities, which offer a more personalised approach to lending, are helping small businesses survive and regrow.

Tellingly, alternative finance is playing a key role in the government’s Covid-19 business support strategy, in particular with regard to the Coronavirus Business Interruption Loan Scheme, which offers access to a range of finance facilities, including alternative finance services.

What businesses need to know about SME funding in 2021

The Covid-19 era seems to be in its last throes, but the next few months are going to be some of the toughest for businesses, in particular for small ones. Making it to the spring and beyond will not be easy for many firms. That is why it is vital that business owners are aware of all the funding options available to them, from government support schemes to alternative finance facilities.

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