Alternative business funding – what to consider?

A number of the Government stimulus come to an end in March 2021 including deferred payments to HMRC for VAT, and Corporation Tax etc. which will fall due for payment in March albeit these can be spread over 11 months. 

These measures coincide with the winding down of the Furlough Scheme in April 2021, placing a further financial burden on many businesses.

We will shortly enter a phase where traditional bank funding will become more difficult to secure. The market to re-bank a business with another high street bank will become increasingly difficult. 

Lenders will start to turn their attention away from new lending and concentrate more on managing existing customer accounts, where profitability has deteriorated over the last 12 months, but liabilities will have increased. 

However, as high street banks reduce their lending appetite, an opportunity will arise for alternative and specialist business lenders to play a key role in helping businesses survive.

We are clearly in exceptional times where banks will start to make moves to protect and manage their own risks, resulting in a marked contraction of available funds.  There will be a large number of businesses that have historically traded profitably but will soon be starved of cash flow and facing severe contraction. 

Alternative business lenders have a different approach to risk. They often focus on certain sectors and can be more flexible with their lending solutions and approach, which could be of value to businesses seeking to establish a new borrowing relationship.

During the next few months, we are going to be in uncharted waters and facing a number of headwinds. Business owners must be aware that there are alternative providers in the marketplace that could help them with their financial problems. 

The team at Poppleton and Appleby have worked closely with many alternative business lenders who will support good businesses and look at all possibilities of lending. 

If you feel you have a client or are aware of businesses that may need refinancing, bridging loans or working capital, please contact our partners and team for advice on business finance and business support.

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