SMEs Deserve Better – What Support and Help do They Need? By Mike Randall, CEO, Simply Asset Finance

The last three and a half years have been like no other in living memory. The UK has experienced an unprecedented period of economic uncertainty; a global pandemic followed by soaring interest rates, rising energy prices and a cost-of-living crisis which has made it harder than ever to run a successful business.

At the beginning of the global pandemic a lot of businesses focused simply on surviving and keeping their heads above water, some refocused their production to help the country with PPE and sanitizer supplies others were essential businesses and kept working throughout, ensuring that the refuse was collected, maintenance continued, and roads continued to be built.  When the country finally emerged from multiple lockdowns and the pandemic finally abated, these firms have had to reassess their business models, looking at a new world that has been transformed.

During the pandemic, many of these businesses needed support from banks and financial institutions, these were unprecedented times and many also had to rely on Government schemes to survive, not because they were bad businesses, but because the world shut down. But often this help wasn’t available as the majority of lenders take a score card approach, if you tick all the boxes then you receive support, if you don’t the application is rejected, with multi-generational firms going under as they weren’t able to restructure their finances.

Simply believes that small business owners deserve better. These entrepreneurs are innovators and forward thinkers, who work incredibly hard to be successful. Their success enables them to create jobs in their local community and drive the economy forward. With the current economic and political turmoil SMEs need help, they need finance, refinance and equity to grow and prosper. 

When Covid-19 first hit, the Government stepped up relatively quickly to provide loan support guarantees so that lenders could start lending again and provide SMEs with vital funding. This support enabled lenders to take the credit risk of a borrower whose immediate credit outlook was hard to assess due to the prevailing economic uncertainty.

Whilst high street lenders were the first to be accredited for these schemes, alternative lenders didn’t receive their accreditation until the Summer of 2020 and, whilst they may have been slightly later in being accredited alternative lenders such as Simply have played a vital role in the roll out of these schemes and the support that alternative lenders has provided small businesses has been critical.  According to statistics published by the British Business Bank, alternative lenders delivered 22% of CBILs. This is a clear demonstration of how alternative lenders had the ability to deliver funding where it is needed and demonstrates how alternative lenders can provide solutions in times of crisis. The Recovery Loan Scheme is another example of an effective mechanism which enabled SMEs to get access to finance as they look to invest and grow their business.

Worryingly, many prominent lenders withdrew support for small businesses as the crisis worsened,  and alternative lenders were needed more then ever. When Simply Asset Finance was established, we sat down with a blank piece of paper and created a blueprint for what a good lender should look like. It was important that we were nimble and able to stand out from other lenders. There was also a focus on building a business model that would allow us to cope with economic and political uncertainty.

Nobody could have foreseen a global pandemic, the invasion of Ukraine or the current energy crisis, but Simply has continued to lend. It is imperative to us that our customers know that we are there come rain or shine, that is what they need.

Technology will never replace the benefit of trusted relationships, but they do enhance it.  At the height of the pandemic SMEs struggled to get access to lending from high street lenders, despite often being multi-generational businesses. Our door remained open, and we continued to support these businesses throughout the pandemic.  

Small business owners need to be able to access support from lenders who understand their business  – they want to trust their lender and know that they have a grasp of the issues they are facing. That is why when Simply was established, we built the team with industry specialists – they have been on the other side of the fence and are acutely aware of the issues their customers are facing.

Aside from having access to lending, rising energy prices is another significant issue facing businesses this winter. The Government recently announced a series of measures to help businesses with spiralling energy bills. This was a welcome development and will help small businesses who have been crying out for help to limit the pain caused by the increased costs, and whilst there is now certainty for the next few months, a tough year remains ahead for many small businesses.

Understanding the diversity of the UK SME sector and how these factors influence SME mindset, behaviour and growth prospects is fundamental to designing solutions that can help business owners accelerate growth in their businesses.

There are many support programmes in place for small businesses across the country, and whilst these programmes can be useful resources, if personalisation is at the heart of their design, they will be able to propel significantly larger numbers of businesses to scaleup status. It is also important that any potential support programme is flexible enough to fit within a busy business-owner’s schedule.

The key theme emerging is that the support small businesses receive, be that from Government, lenders or policy makers, needs to be tailored to suit individual businesses. It is vital that everybody who supports small businesses are nimble in their approach. While there are multiple issues that small businesses have to deal with, they are the backbone of this country and it is imperative that they thrive, and that Government, policy makers and lenders continue to support them.