End-of-year ponderings from David Grosse, founder and managing director of Number Eight Business Finance
On 25 December, when I finally arrive at the foot of my Christmas tree with slippers on, pipe in hand and the sound of distant carols ringing in my ears, what will I deduce from the past 12 months?
Firstly, I have never known a year to pass so quickly! In fact, most of 2020 has been a complete blur due to the extraordinary twists and turns that have laid before us.
Of course, the full impact of the pandemic will not become clear for some time to come. And the toxic smog of COVID-19 that continues to linger over our economy will not clear until we finally regain some level of certainty.
So, when the crackers have been pulled, the Christmas tree has been taken down and the decorations have been put away for another year, what might we take away from all this?
Well, at least the weather was glorious! When the pandemic hit our shores and the first lockdown was introduced, I think we had more periods of sunshine than I can ever remember. The walks, the river swims and the various Dorest beaches were a highlight of my daily life for several months. Other highlights included successfully finding alternative ways to get work done without having to go into the office, keeping fit and being consumed by hours of streaming from media platforms that, typically, I wouldn’t have the time to engage with.
Most of all, this year emphasised the importance of maintaining regular contact with family and friends, via voice or video calls. These are all things I would consider to be positives and are personal reflections I will never forget.
As for professional side of things, it is easy to criticise how much the government did or did not do. For me, the Bounce Back Loan Scheme was an injection of relief at the right time. The Coronavirus Business Interruption Loan Scheme, on the other hand, did not leave a good taste in the mouth and that landscape remains a mess for many. Thousands of businesses have had to endure hardship, and the challenges just keep on coming. I would like to have seen the government increase the cap on the Bounce Back loans from £50,000 to £100,000. In my experience, that would have given the small and micro businesses further confidence to stay afloat as the pandemic continued to wreak havoc.
Unfortunately, there is one present the world of business finance would like to open right now which is not likely to appear anytime soon. Metaphorically speaking, this present would be wrapped and dressed in the biggest red bow and inside would be the ultimate guidebook to helping Britain get back on its feet (and quickly).
While we must try to remain positive, there will always be an element of realism when you’re an advisor or intermediary and trying hard to help viable businesses have a chance to rebuild and bloom once more.
If I hear one more lender say, “We are open for business”, but then have no interest in lending unless the risk is minimal, or the rates offered are ridiculously high, then beware of my Grinch-like response! This is not the time for false promises, especially when we have business owners to help and expectations to manage.
However, it’s not all doom and gloom out there. A vaccine is coming, and a potential end to the pandemic could finally be in sight next year – which is the best present anyone could wish for.
“I am confident that we will all do our best to keep the fires burning.”
Counting the cost
With government loan repayments now on the horizon and more redundancies expected, has anyone got any idea what the contingency is likely to be? If the government can’t (or won’t) provide continued financial support, and the lenders can’t (or won’t) offer financial support unless the balance sheets and personal guarantees are substantial – then what?
The current UK financial deficit is in excess of £210bn and counting, and there is no short-term fix. Someone somewhere needs to recognise that unless further job losses and business failures are not stemmed, the deficit will simply continue to multiply for many years to come.
I am no economist, but I am a realist and despite my doubts about whether Father Christmas does exist or not, I have no doubts that unless access to affordable and non-algorithmic driven finance comes back to the market soon, we really are going to struggle with a commercial needle drop that will lay deep beneath the true economic carpet that was already starting to look a bit tired before the national lockdown.
I am confident that we will all do our best to keep the fires burning, as this is typically what we are good at. Hopefully that guidebook will be found under the tree and, together, our industry will see clear the various challenges and, more importantly, the stocking full of opportunities that await us all in the new year.
David Grosse, Managing Director,