Tim Boag

How small businesses are navigating these turbulent times

As the UK's lockdown measures begin to ease, SME owners will be thinking about how to continue to protect their livelihood, as they make adjustments to the 'new normal'.

With the government beginning its phased approach to re-opening the economy, businesses will have to make sure they follow government guidance and put measures in place to reduce the transmission of Covid-19. This will mean that many SMEs will likely operate below capacity to meet the social distancing requirements and customers may not return immediately, for fear of contracting the virus. 

Our focus at Aldermore is to continue to do everything we can to back UK SMEs throughout this hugely testing period. We have examined the effects that the pandemic is having on SMEs, analysing the outlook and resilience of businesses. Aldermore’s research1 shows that the average SME has lost a third (34%) of its income as a result of the crisis, with the hospitality and leisure sectors the worst affected - losing over half (54%) of their monthly business income. 

SMEs have swiftly adapted to these difficult trading conditions and are, with some success, navigating these turbulent times. Our research shows that 72% of SMEs surveyed have taken steps to reduce costs as part of their business plan. Small businesses in the manufacturing industry have been the most innovative, with 56% adapting their businesses to cope with the pandemic. 

Cutting costs could involve strategies such as utilising the wide range of measures the government has put into place to support SMEs. Some of our business customers were struggling to identify and work through all of the support available to them – which is why we put together an easy to read guide for our customers and intermediary partners, summarising all the key measures announced so far and put them into one document. The Aldermore Government Business Support Guide can be accessed here. 

One of the key measures announced is the Coronavirus Business Interruption Loan Scheme (CBILS). Aldermore is an accredited lender of the asset finance and invoice finance variants of CBILS.

Whilst ensuring a business has the right financial support is vital, there are other measures that businesses can take to help operate effectively during this period, such as embracing innovation and technology. Aldermore’s research found that one in six SMEs (17%) has shifted more of their business online and 15% have invested in new technology to keep their business running remotely. 

At Aldermore, we are committed to ensuring our colleagues, brokers and customers have the backing they need during this crisis. That’s why Aldermore’s ssset finance team fast-tracked the launch of our online broker portal, Asset Backer, to all of our intermediary partners. Asset Backer offers intermediaries a paperless end-to-end process, which includes electronic proposals, documents and signatures, enabling them to continue business with their customers at a safe social distance.

Businesses across the country have shown tremendous perseverance during the lockdown so far. It’s been amazing to see what creativity and initiative can achieve during times of crisis. One of our invoice finance clients, Didsbury Gin, a Manchester based gin producer, halted production so it could make hand-sanitiser for Greater Manchester Police during the pandemic.

Another excellent example of embracing technology is Mauveworx, a large family run marketing materials manufacturer based in Dorset and a customer of Aldermore. They mobilised their resources to produce urgently needed PPE. Within a day, they had gathered their 3D designers, printers and production team to create a prototype of a protective face shield that could be used by frontline workers. Their story epitomises the entrepreneurial spirit and innovative thinking that we are proud to champion at Aldermore. 

The road ahead is still very uncertain, and businesses must continue to manage their finances prudently. Aldermore is determined to back our customers throughout this period, whether that means providing them with additional funding or simply offering support and guidance. Information about how we can help can be found on our website here.  

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