Supporting SMEs through the COVID-19 crisis

Written by Tim Boag, Group Managing Director of Business Finance, Aldermore

The COVID-19 pandemic is creating unprecedented challenges in our society and local economies. It’s a worrying time for individuals, families and businesses. Everyone is having to adapt to the new conditions and assess the implications for the future.

For small and medium-sized businesses (SMEs), some of these challenges are acute. Many SMEs operate on narrow margins and interruption to revenue can pose a real threat to their futures. How to keep paying staff, how to keep some income coming in, whether there are possibilities to adapt the business and create new services in light of COVID-19 – these are all critical questions.

At Aldermore, we stand ready to help and support our SME customers. Within Business Finance, we provide a wide range of support, whether that is to finance an asset, unlock cash tied up in invoices, bridge a finance gap, invest in commercial property or obtain finance for property development. We are also active on the personal front, supporting investors and homebuyers with mortgages and savings products.

Our focus is to continue to do everything we can to support the UK SME economy through this uniquely challenging period. Our customers are seeking guidance and support on funding and finance, and how they can access what is right for their business. Unsurprisingly, our Business Finance teams have seen a massive increase in customer contact over the last few weeks, with a surge in requests for forbearance. Through the dedication and hard work of colleagues across our organisation, we have been delighted to help, within just a few weeks we have supported many thousands of SME customers.

If you are concerned about cash flow, my recommendation to any SME would be to speak to the finance providers you do business with and discuss your situation. As an industry, we want to help our customers through this difficult time and any responsible lender should be prepared to offer some forbearance measures for businesses affected by COVID-19.

There is also a whole range of government-backed initiatives that have been announced, so another crucial step is to examine those very carefully and see what may be applicable to your business. To help customers, we have created a summary of all the key measures announced so far and put them into one document – the Aldermore Government Business Support Guide – which can be accessed online.

One of the key measures announced is the Coronavirus Business Interruption Loan Scheme (CBILS), which is backed by the Government-owned British Business Bank and delivered through 40 accredited finance providers. Aldermore is delighted to be an accredited lender in the Asset Finance variant of the CBILS. We offer advances of between £50,000 and £250,000, with no fees and with an option to take up the Business Interruption Payment where the first 12 months’ interest payments are covered by the government. We are also looking to go further with the CBILS and deploy it across Invoice Finance.

In addition, we have expedited changes in our ways of working to better support customers during this time. In Asset Finance, we have revised processes and fast-tracked the launch of our portal Asset Backer to all our intermediaries. The new portal offers a paperless end-to-end process, with electronic proposals, documents and signatures, enabling intermediaries to continue business with their customers at a distance.

With our Invoice Finance products, we have created a tailored forbearance policy, which recognises customers’ changing circumstances and releases much needed additional cash. In addition, we have carried out an extensive review of our customer fee structures to ensure these reflect the challenges many are facing in generating sales and collecting payments from their customers.

Although these are difficult times for many, it has been truly inspiring to see examples of businesses finding innovative ways to support the national effort in a time of crisis. For example, one of our Invoice Finance clients Didsbury Gin halted production and started making hand sanitiser on a mass scale for the Greater Manchester Police and the NHS. Another Invoice Finance client Mauveworx, a family-run marketing materials manufacturer based in Dorset, recently mobilised their resources to produce urgently needed PPE, to support the NHS in their fight against COVID-19.

These stories epitomise the entrepreneurial spirit and innovative thinking that we are proud to champion at Aldermore. We are passionate about supporting our clients, providing them with additional funding to diversify into new areas or simply reach the other side of the crisis. Information about how we can help can be found on our website.

Help and support is out there for your business – we can and will get through this together.