On Monday 4th January, the UK was put into its 3rd National lockdown, and businesses all over the country were forced to close once again. The repeated impact that 3 national lockdowns, along with months of a strict tier system, has had on SMEs in the UK, has been destructive. Funding Bay want to share some financial tips and small ways that you might be able to save your business as we endure the (hopefully) final months of this pandemic.
Make agreements with customers and suppliers
Our first financial tip, is to make clear agreements in advance, with your customers and suppliers. Agree about the invoicing for a specific assignment so you can reduce payment terms. This means you have working capital faster and your liquidity improves. For example, give discounts to customers that can make quick payments, send out invoices in parts to customers on long-term collaborations to get paid throughout the project, or ask for advanced payments for big assignments.
You may also want to consider using invoice finance. Invoice finance allows businesses to release cash tied up in their aged receivable account. A lender, such as Bibby Financial Services, will provide your business with your unpaid invoices in advance, so that you can free up your cash flow as you do not have to wait until you receive the invoice payment. Get in contact with Funding Bay if you are interested in invoice finance.
Find alternative ways to keep your business open
Our next financial tip: The best way to keep your head above the water as a business is obviously to keep a stream of income going. If restrictions are already in place in your area, your business could once again be forced to shut its doors, so it is important to be reactive. Look to move to selling products and services online, setting up a streaming service, or provide home delivery where possible to not only keep your customers happy and involved but your income going.
You might want to consider digitalising your business in order to reach customers in an online fashion. In order to achieve this business growth and expansion, you should look toward the CBILS scheme which has been set up to help SMEs get back on their feet. The government backed scheme lends up to £5 million with the first year free. Get in touch with Funding Bay to apply for CBILS.
Consider CBILS
The government backed loan scheme has recently re-extended its deadline to March 31st 2021. The Coronavirus Business Interruption Scheme (CBILS) was designed to help businesses bounce back from COVID and invest in their growth. The scheme has already been a lifeline for thousands of small business owners around the country. CBILS loans are aimed at firms struggling to survive the current climate, but can also be used to support growth strategies. Under the CBILS scheme, the government lends loans of up to £5 million and charges are covered for the first year. More than 70,000 UK businesses have been approved, with £14 billion in CBILS funding.
44 accredited lenders are currently lending under the CBILS scheme. Funding Bay work with a panel of these lenders including, Nucleus, Iwoca, Bibby, Ultimate Finance and Funding Circle, and our team of experts work to ensure that the right lender is matched with the right business. Funding Bay has so far helped raise over £25 million for businesses. Get in contact with a member of our team here.
Check out our business loans calculator here.
