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An alternative approach to business finance

Brian Rubins is executive chairman of Alternative Bridging Corporation

 

It’s an understatement to say that 2020 was a trying year for business and the start of 2021 looks to continue that trend. But with the rollout of the vaccine programme now underway there is hope of a return to some normality later in the year and we can at least look forward with a degree of cautious optimism.

One thing that is clear is that in order for businesses to get back on their feet and return to growth, they are going to need funding. Government schemes like the Coronavirus Business Interruption Loans Scheme (CBILS) and Bounce Back Loan Scheme (BBLS) provided a necessary life support in 2020 and they have proven very popular. By early July last year, more than 53,000 businesses had accessed loans worth over £11.4bn through CBILS and more than one million small businesses had accessed BBLS taking loans worth nearly £31bn. But these schemes will be withdrawn, and businesses will need to look again to the private sector

According to the SME Finance Monitor survey carried out by research company BVA BDRC reports that at the end of Q2 2020, 16% of businesses said they planned to apply for finance and 32% said they expected to be applying for finance at some point in the future.

Having access to capital is one thing, but what businesses really need is fast, flexible access to capital that can empower them to make the most of opportunities, without penalising them if they don’t need to utilise the funds.

Fortunately, there is a product available in the bridging market that enables businesses to arrange a funding facility, secured by a first or second charge on a commercial or residential property, which can then be deployed and repaid on multiple occasions as and when it is needed. This approach gives businesses access to liquidity on demand which can help them to be fleet of foot and make the most of every opportunity as the economy recovers.

At Alternative Bridging Corporation, we offer the Alternative Overdraft, which provide quick access to capital, avoids expensive setting up charges each time a loan is needed and doesn’t insist on businesses paying interest when the facility is dormant.

Business finance is going to be crucial in supporting the economic recovery in 2021 and smart business will look for finance that is fast and flexible – an alternative approach may be just what is needed.

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