PROSPER MAGAZINE: DIGITAL EDITION
LENDER SEES SOME CAUSE FOR BUSINESS OPTIMISM IN COMING MONTHS AND SHARES THREE KEY WORDS OF ADVICE
West Midlands based alternative business lender BCRS Business Loans believes that there is some cause for optimism in the coming months, despite the difficulties small businesses are currently facing in the third national lockdown in England.
We spoke to the lender’s chief executive, Stephen Deakin, to find out how he thinks our region’s SMEs are bearing up and asked him to share three pillars of advice to help SMEs navigate the coming months.
Difficult months ahead
“Small businesses in the West Midlands are some of the most resilient in the world, but difficult months undoubtedly lie ahead as they aim to recover from a third national lockdown,” admitted Stephen.
“Covid-19 has dealt a revenue blow for most small businesses, and this latest lockdown has prolonged one of the most economically challenging periods in UK history. As an SME ourselves, the team at BCRS have faced the same challenges as our customers, which has put us in a unique position as a funder that fully understanding the difficulties our loan applicants are facing.
“Recent findings from Lloyds Bank’s Business Barometer report found that overall business confidence in the West Midlands dropped to minus four in January, primarily due to the current lockdown and subsequent economic uncertainty, with 61 per cent of businesses saying that current restrictions had caused a reduction in turnover.
“With such widespread uncertainty, Government schemes to prop up small businesses – such as the Coronavirus Business Interruption Loan Scheme (CBILS), Bounce Back Loan Scheme (BBLS) and Job Retention Scheme – have been vital in keeping businesses afloat over the past year.
“BCRS alone, which is a delivery partner for CBILS, has experienced a 45 per cent increase in demand for loans since the start of the pandemic. But as we edge closer to the date when these schemes come to an end and non-CBILS lending from traditional lenders continues to fall, it is important that small businesses in the West Midlands look at alternative sources to ensure they are able to secure the finance they need to recover effectively and limit redundancies in the long term.”
Some cause for optimism
Stephen continued, “However, there are promising developments that can provide small businesses with some optimism for the coming months. Despite the difficulties faced, a Robert Half survey found that 88 per cent of UK businesses see opportunities coming out of the pandemic.
“Despite the Business Barometer report showing overall business confidence being a negative due to concerns surrounding the impact of Covid-19 on the macroeconomy, West Midlands businesses are increasingly confident about their own individual prospects’ month-on-month, with figures up five points to 6 per cent.
"It is encouraging to see that many businesses are planning for their transition from ‘survival’ to ‘recovery and bounce back’ as soon as some form of normality returns.
“This positivity has been reinforced by the Bank of England, which expects the UK economy to rebound strongly thanks to the rapid rollout of the vaccination programme.
"Writing in the Daily Mail, Andy Haldane, the Bank of England’s Chief Economist, said “The economy is poised like a coiled spring. As its energies are released, the recovery should be one to remember after a year to forget.”
“Having most of the UK population vaccinated by July should facilitate the easing of social distancing guidelines, which will subsequently lead to higher economic activity.
“Having spoken to small businesses throughout the pandemic, making workplaces Covid-secure not only incurred an unwelcome expense but, in some cases, also affected firms’ overall productivity, so removing this obstacle will be an enormous step forward for small businesses,” said Stephen.
Key recommendations for SME owners right now.
But in the meantime, as businesses battle with the continued interruption to trading, Stephen has shared three tips that emerged from a recent webinar that BCRS Business Loans hosted in partnership with Triodos Bank UK.
The webinar invited business owners – including Ro Hands, the managing director of digital media and creative agency LearnPlay Foundation in Wolverhampton – to join a conversation about building resilience and fostering growth in the coming months.
“The first word of advice was centred around the importance of communication. As the adage saying goes: a problem shared is a problem halved’. We would always advise discussing any issues that you have with suppliers, customers, landlords, funders, trusted advisers and family and friends at the earliest convenience. Running a business can be a lonely place sometimes, so discussing your issues will really help.
“From a personal perspective, I can’t overstate the value of having a business coach to bounce your thoughts and ideas off and I truly believe that the coaching sessions equipped me with the resilience and agility needed to lead BCRS through these unprecedented times.”
“And by diversification, I don’t necessarily mean completely turning your business model upside down and starting again; sometimes just minor tweaks can yield strong results and overcome obstacles that are negatively impacting your business.
“Secondly, don’t wait! Don’t wait for the Coronavirus pandemic to be over before you adapt your business model. There is a strong likelihood that some trends are here to stay so if there is an opportunity for improvement, there is no time like the present.
“For example, Ro from LearnPlay Foundation discussed how virtual meeting software such as Zoom will form part of the company’s long-term strategy, as it allows her to deliver pitches in a fraction of the time – as, crucially, delivering a pitch virtually doesn’t involve travelling. Meanwhile, here at BCRS, we have implemented Docusign as a way of signing loan documentation online and remotely – enabling us to meet changing customer needs and expectations.
“Although the thought of implementing new technology is often daunting and considered costly, it is important to consider the cost-benefit analysis over time.”
“Collaboration is often hugely rewarding for businesses and may enable you to extend the reach of your product or service. Aside from the obvious route of collaborating to increase sales or deliver services in conjunction, joining knowledge sharing forums and networking groups is another prime example of collaboration.
“When choosing partners, make sure they are aligned with your company vision and values and are easy to work with.
“Guest speaker Ro Hands even discussed how contract delivery issues during coronavirus had prompted her to collaborate with a key competitor in order to pull resources together and ensure contracts were delivered successfully during a pandemic. This is a great example of how pulling together is more important now than ever before.”
The next few months will continue to be difficult for our region’s small businesses, but I am confident that they have the resilience required to get through this lockdown and will be in a great position to take advantage of opportunities that arise as restrictions are eased, kick-starting business recovery.
To discover more information about BCRS Business Loans, visit www.bcrs.org.uk.