While the year ahead looks set to be another bumpy one for SMEs, they are adapting. However, these firms have major concerns for 2022, and if they are to survive and thrive, it is key that they have the capacity to address them.

Firms most worried about inflation and rising prices

Unsurprisingly, a new study, from iwoca, has revealed that inflation is the biggest concern for small business owners going into 2022. Inflation rose notably towards the end of 2021 and the Bank of England is predicting further increases in the year ahead.

Another major concern is closely linked to the impact of rising inflation, with almost half of business owners expressing worry over the effect an increase in energy, fuel and raw material prices will have on operating costs.

Ongoing impact of COVID-19 and Brexit also among concerns

In addition, there is ongoing concern over the impact of COVID-19 and Brexit, in particular with regard to how measures and continued uncertainty related to both will affect the ongoing supply chain crisis as well as pricing and trade capacity.

How developments in these areas unfold and how businesses are able to respond to them will be critical to the performance of the economy and the health of the small business sector in the 12 months ahead.

Managing impact of key developments vital to survival

Given the outlook and the current market fragility, planning and flexibility when it comes to finance will be vital for small businesses if they are to successfully navigate the choppy waters that lie ahead. While the end of the year may well see greater stability, getting there in good shape will not be straightforward.

So, how can small businesses manage the impact of these developments on cash flow and business growth? Alternative finance can help.

Protecting cash flow and how alternative finance is helping

With regard to alternative finance, in the wake of prolonged caution from traditional lenders, which is an issue that has returned during the pandemic, services such as invoice finance, asset finance and peer-to-peer lending, are proving a vital source of capital for small businesses, both for maintaining cash flow 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.

Furthermore, alternative lending is playing a prominent role in the government’s headline emergency support scheme, the Recovery Loan Scheme (open now until the end of June 2022). 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.

Addressing business concerns and SME finance options

Small businesses face another challenging year ahead but it is one that also holds opportunities for those that have the flexibility and frameworks in place to respond to developments. Key to this preparedness is financial planning and as such, awareness of all the finance options available is critical, including 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.