The decision to keep the final lockdown restrictions in place for an additional month has come as a sharp blow to many small businesses. Already under extreme pressure, these firms have to find a way to stay afloat for another four weeks. How can they do it?

While the delaying of the so-called Freedom Day didn’t come as a surprise in the end, the extension of trading restrictions has major implications for many small businesses, in particular those in the events and night-time sectors that have been unable to open since the pandemic hit in spring 2020.

Understandably, reaction to the delay has quickly focused on financial support for these firms, in particular with the furlough scheme and the business rate holiday for the retail, hospitality and leisure sector due to end soon, and as the prospect of having to make loan repayments looms.

Notably, the government has rejected calls from businesses to extend the furlough scheme and the business rate holiday in light of the four-week delay, stating that sufficient support is already in place. This is a position that has not gone down well in some quarters, including in the small business sector.

Staying afloat and the role of SME finance services

Whatever the nature of the discussion around the government’s decision and its reaction to calls to make further support available, for many small businesses, it is now a matter of having to dig deep once again and finding ways of paying the bills and maintaining cashflow, while operating at a reduced capacity or remaining closed, for a while longer.

As such, it is vital that these under-pressure firms are aware of all the finance options available to them, from the government emergency lending schemes and traditional banking facilities to the service of alternative lenders.

How alternative finance can help SMEs maintain cashflow

With regard to alternative finance, 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 recovery and regrowth.

Notably, alternative lending is playing a prominent role in the government’s new headline emergency support scheme, the Recovery Loan Scheme. Invoice finance and asset finance between £1,000 and £10 million per business are available under the initiative. This profile is helping cement the reputation of alternative finance in the business sector.

Making it out of lockdown and SME finance options

It remains to be seen if the government will review its position on making extra support available to the small businesses impacted by the decision to keep the final lockdown provisions in place until July 19. Regardless of any changes in policy, these firms have to find a way to survive for a bit longer. To do this, it is important that they have access to all the SME finance options on the market.

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