Business as usual?
The British Business Bank reports that SME lending has returned to pre-pandemic levels, but is your company ‘back to normal’? asks Complete Commercial Finance’s Michael Moore.
How’s business? It’s a question we always ask when chatting with clients, and the response we’re typically hearing at the moment is that business owners are uncertain about how the rest of the year will play out. While the international unrest is concerning for us all, for many the main issues their company is facing are rising costs – particularly for energy and fuel – supply of materials and recruitment.
We recently launched our annual Business Survey which takes the temperature of local companies’ confidence levels and have asked respondents how Brexit, the pandemic and rising inflation have impacted their performance. While it’s hard to predict how the coming months will play out, there is clearly a real mix in confidence, ranging from optimism to cautious hesitancy.
One thing that is certain is that business doesn’t stand still and it’s no good holding back on plans to ‘see how it goes’ – there’s always someone else willing to seize the opportunities which will surely pass you by. Business confidence often comes down to financial certainty and it is in this area which companies can take action – even in times of uncertainty, creating stability can ensure that a company is able to weather tough times.
A clear example of this is the way that businesses responded to government emergency finance schemes during the pandemic, with large numbers of companies taking up bounce back and coronavirus business interruption loans. While this was under exceptional circumstances, access to finance ensured many businesses were able to maintain cashflow. In our annual survey, we are interested to learn how many local firms used this funding and what percentage have extended, started to repay or repaid these loans in full.
The British Business Bank (BBB) recently reported that gross bank lending to smaller businesses has returned to pre-pandemic levels, and interestingly 51 per cent of this – a record share – was provided by challenger and specialist banks. Its market survey said that one in three smaller businesses say they are happy to use finance to fuel growth, although the East of England fell tenth in 12 regions surveyed, indicating that there is still room for improvement in understanding and using external funding.
Interestingly, the BBB reported that invoice finance and asset-based lending are ‘front running the UK’s general economic recovery’, stating: ‘It is an excellent funding tool for SMEs looking to generate working capital without shortening payments terms to their customers, flexing their own suppliers, or taking on additional debt’.
In our own Business Survey last year, one of the key findings was that 29 per cent of respondents felt they didn’t know where to find the right finance, and a further 29 per cent felt a poor credit history would prevent them from successfully applying for a loan. Commercial finance is perhaps one of the least understood yet most important business tools a company can use to grow and utilising a broker to navigate and access often specialist funding can be transformative. Whatever the state of play in your own business, we are keen to hear your voice – if you haven’t already done so, please take a few minutes to complete ten short questions in our survey and share your views – we are listening and here to help.
