Finance will be critical in the months ahead as businesses start to emerge from the impact of the pandemic. Steve Parry says now is the time to examine your options
Let’s be honest – it’s been a pretty depressing start to the year.
Inflation is already running at well over five per cent, the Bank of England has raised interest rates for the third time in three months and most of the Government’s Covid support schemes have come to an end.
The Bank itself has not ruled out further rate rises, says inflation could reach over seven per cent at its peak and there’s a pretty hefty dose of political uncertainty as well as the war in Ukraine to add into the equation to boot.
Oh, and did I mention the Budget which is looming in a few days’ time?
With all that in mind, you might think now is just about the worst possible time to be considering taking on new finance.
But actually, the opposite is the case.
Now is the perfect time for businesses to start considering their growth plans for the next 12-24 months and start really analysing what funding requirements they may have over that period.
One reason to strike now, while the iron is hot, is the continued availability of finance under the Government’s Recovery Loan Scheme.
The scheme had been due to end at the close of 2021, but Chancellor Rishi Sunak extended it in his Autumn Budget so that it now remains open until the end of June.
Mr Sunak also made some amendments to the old scheme – meaning that from January 1 only small and medium sized businesses can apply and the Government guarantee against the loan dropped from 80 per cent to 70 per cent.
But the scheme – aimed primarily at businesses which are viable but need help to recover and grow due to Covid-19 – means qualifying businesses can still apply for up to £2million of funding on very attractive terms.
Facilities are available as asset finance, invoice finance, overdrafts or term loans, with different terms attached to the type of finance required ranging from three months to six years. But personal guarantees are not required for loans below £250,000 and the scheme is open to businesses which have previously benefitted from a Bounce Back loan or CBILS payment.
Of course, the Recovery Loan Scheme won’t be right for everybody. That’s why here at Q we have developed first-class relationships with a wide range of lenders and can help you find just the right solution to your finance needs.
It is also worth businesses taking the time now to review whether the funding they’ve taken on through the pandemic is still the right thing for them. There may be potential to refinance the existing government debt, extend terms or reduce rates to help overcome short-term turbulence.
Our expertise, flexibility and contacts mean we can often suggest a range of options including asset finance, invoice finance and commercial mortgages you might not be aware of and are unlikely to be offered by your local bank.