The strain of Covid-19 is showing on small business owners and employees. Their mental health is suffering. And this poses a serious threat to company performance. Greater investment in staff wellbeing is needed, but how can firms afford it?

A new study from Hitachi Capital Business Finance has revealed that over half of small business owners in the retail are losing sleep because of concerns over the impact of Covid-19. The affect on wellbeing is particularly acute for owners and staff that are working at home.

Data from the National Institute of Mental Health back up these findings. The organisation’s figures show that 49% of entrepreneurs are struggling with mental health issues, compared to 32% of the general population.

The findings of the latest SME Tracker from ACCA and the Corporate Finance Network provide more evidence of the wellbeing problems that small businesses are suffering. According the Tracker for March, almost a quarter of small businesses said that their mental health was worsening as a result of stress related to the pandemic.

The Tracker also revealed that one in seven small business bosses were feeling unable to cope with work pressures, while another one in 13 said that they had had negative thoughts or suicidal feelings because of fears linked to the impact of Covid-19 on their businesses.

The need for worker wellbeing policies and how to finance them

It is clear from these studies that investment is in needed in small business employee wellbeing. If the small business sector is going to record the recovery and regrowth that is vital the national economy, it’s workforce has to be physically and mentally healthy.

The good news is that there plenty of ways in which small businesses can monitor and help improve the wellbeing of their staff. Work wellbeing policies can comprises a wide range of tools and measures, from apps and rewards to funding home office equipment and ensuring payment accuracy and reliability.

However, the big question is, at a time when small businesses are battling for survival, how can they afford this essential investment?

Alternative finance can help. It is vital that small business owners are aware of all the funding options available to them, from government emergency loan schemes to the services of alternative lenders.

SME wellbeing investment and how alternative lenders can help

With regard to the alternative lending sector, in the wake of prolonged caution from traditional lenders, which is an issue that has returned during the coronavirus pandemic, alternative finance facilities 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 regrowth.

Notably, alternative lending is playing a prominent role in government emergency support schemes. A key part of the soon-to-be-closed Coronavirus Business Interruption Loan Scheme, invoice finance and asset finance will be integral to its replacement, the new Recovery Loan Scheme. Invoice finance and asset finance between £1,000 and £10 million per business will be available under the initiative. This profile is helping cement the reputation of alternative finance in the business sector.

Employee mental health and SME finance options

For all the optimism surrounding vaccination and its impact on society and the economy, the road ahead is still rocky for small businesses. If these firms are to survive and regrow, they need to safeguard the health of their most important assets: their staff. This requires investment at a difficult time and this is why it is vital that businesses are aware of all the funding options open to them.

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