As high streets open up fully after more than a year in some form of lockdown, so the issue of business rates and their affordability is back in the news. The burden is particularly acute for smaller firms. So, how can they afford the payments?

The business rate holiday has been a lifeline for smaller businesses. However, the relief now on offer has been cut by a third and it will stop completely in March 2022. So, there’s already more pressure on cashflow. And in nine months’ time, the bills will return to the full rate.

At the same time, while the so-called Freedom Day has seen all but a very few restrictions lifted, with consumers now able to access goods and services almost in the same way they could before the pandemic, high-street stores are still very much struggling for survival.

Retailers will be hoping for a Freedom Day fillip but the lifting of restrictions is no guarantee that normal revenue streams will return. Let’s not forget that the high-street wasn’t in good shape before the pandemic and now online shopping is far more entrenched. Recovery and regrowth will be a challenge for stores, in particular smaller ones.

Phasing out of business rates holiday puts firms on alert

This realisation has led to HMV, already a victim of the reshaping of the high street, to call for further reform of the business rates. The music and entertainment wants the government to change how the rates are formulated to better reflect the current condition of the high street and the wider economy.

Whether HMW get its wish remains to be seen, but regardless of any new reform, high-street retailers, including smaller firms, have to put planning in place that allows them to manage the end of the business rates holiday, whatever the new bills look like.

How can retailers manage the cost of business rates and the impact on cashflow? Alternative finance can help.

Business rates and how alternative lenders can help

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 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 (which is due to run until the end of 2021). 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.

Managing business rates and retailer finance options

Even if the business rates holiday is extended again, it won’t last forever and high-street retailers, especially smaller ones, have to be prepared for the impact this will have on cashflow. This is why it is vital that they are aware of all the finance options available to them, from government support schemes and traditional bank facilities to the services of alternative lenders.

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