David Grosse, founder and managing director of Number Eight Business Finance, examines the challenges facing firms and lenders across the UK as the new year hoves into view
Throughout history, society has dealt with all sorts of calamities and, as people, we learn to adapt to whatever life throws our way. Everyone has a story to tell and, regardless of the emotional ups and downs we face, finding the best way forward and the coping mechanisms required is key to everyday life.
Before I entered into the wonderful and curious world of business finance, I was hopeful that my gift for music would deliver a pathway to fame, fortune and happiness. Unfortunately, despite a mildly successful career with a London-based rock band in the early ‘80s, it wasn’t meant to be. But I continue to be inspired by those who have delivered many a fine tune and lyric, based on personal experiences.
One example is a song written by Coldplay, entitled Everyday Life. It includes the following line: “Everybody fails, everybody dreams and doubts. Got to keep dancing when the lights go out.” I think it perfectly sums up the world that most of us are dealing with right now.
Pandemic or not, it is our attitude to life in general that drives us all forward and enables us to embrace the personal and professional pathways that may lie ahead.
My previous articles have summarised the challenges many businesses are dealing with in the current landscape of uncertainty. But, as we all know, the world will right itself again eventually – as it always has done, since time began. Therefore, the debate regarding what needs to happen to ensure the backbone of our economy remains intact has probably been exhausted by both myself and those on the front line of business advice and support.
Many business owners are in a much weaker position now than at the start of the pandemic, making it far more challenging to survive extended closures. The short-term relief provided by the various government schemes thus far will only be papering over the cracks for many.
Either the Coronavirus Business Interruption Loan Scheme needs a major overhaul to enable a higher approval rate, or the market desperately needs a more tailored approach to offer a lending infrastructure that takes into consideration all that has been happening.
Business and personal credit scores are going to be adversely affected, regardless of those creditors saying they will not. Future financials will take a hit too, as accountants commence with their work on the damage caused by lost revenues and the added Bounce Back Loan Scheme and CBILS debts taken. Future cashflow and forecasting has never been a true indicator of what may lie ahead for a business, but how can anyone put together a financial picture for 2021/22 right now?
Regardless of what I may say or predict – and regardless of what is being reported by those who represent UK businesses and their wellbeing – the scale of concern and uncertainty increases with every day that passes. While I may be generalising here, as there have been positives for some market sectors, small and micro businesses in particular continue to suffer greatly in terms of their uncertain futures and, dare I say it, mental health.
While CBILS rules the roost for many lenders, the alternatives remain unattractive due to rates, terms or a combination of both. There are options for those lucky enough to have assets available for the various secured offerings, but otherwise there’s not a lot else.
Help continues to be offered by the many seasoned professionals out there, with social media platforms only telling half the story when it comes to the time and emotion that is being invested into the marketplace at present, for little or no reward. However, without the support, understanding and buy-in from the lending fraternity, our work is often curtailed and that is the biggest challenge faced by the advisory-led intermediaries at this moment in time.
So, with the aforementioned Coldplay playing away in the background, we have all just got to hold tight for everyday life and allow for hope and vision to prevail.
David Grosse, Managing Director,