Despite the noise of the headlines, it is still possible to find funding to help your small business. But what does the landscape really look like?
With costs rising exponentially, most businesses will need some financial help this year.
Here, we tackle the three biggest current funding misconceptions so you can make an informed decision when thinking about your funding options.
Businesses are only using funding to boost cashflow
There is no denying that it has been a difficult couple of years for small businesses. Throughout the pandemic, a lot of business funding was used purely for survival, and to cope with a dramatic reduction in trading.
The energy crisis, looming recession, and general economic uncertainty dominated last year, and continues to present a dark cloud in 2023. However, despite all the current challenges, lots of businesses are seeking funding for growth.
From business loans to grow your operations, hiring or expanding locations, to asset finance to facilitate the purchase of more inventory and equipment, investing in the right funding option could be key to accelerating your business revenue in 2023.
Banks do not want to lend to lend to small businesses
With the consistent economic doom and gloom, it might seem like now is not the right time to approach banks or lenders for funding. However, that is not the case.
Despite a tightening of criteria, lenders are willing to lend.. Higher interest rates do mean higher borrowing costs, so it is worth shopping around to find the right product for you – or using a platform like ours to arrange a variety of quote options in just one straightforward application.
It is also important to note that the range of alternative lenders continues to grow, so you may have more options than you realise when it comes to financing, outside of a traditional bank.
All the government support and grants have ended
Whilst a lot of the support schemes that were introduced over the past few years have now ended, there are still some key packages in place that can help support your business in 2023.
In January, the government unveiled its new ‘Energy Bills Discount Scheme’ for businesses, as a replacement for the current scheme which ends in March. All eligible UK businesses will receive a discount on high energy bills until 31 March 2024.
The scheme has faced criticism as it is a considerable reduction on the current support. Under the old scheme, energy prices were capped in a blanket fashion, but now businesses can only benefit when prices are at or above £107 per MWH for gas and £302 per MWh for electricity.
While the savings will undoubtedly be smaller for lots of businesses, there will still be some relief and protection if prices rise exponentially again. Higher discounts are also on offer for energy-intensive businesses such as steelmakers and manufacturers – so it is worth checking if this applies to you.
The government has also proposed bringing in R&D tax benefits for small businesses after plans to cut an existing incentive – but this is still in consultation.