We asked local lender BCRS Business Loans for their thoughts.

As small businesses across the country continue on their path to recovery from, arguably, the most difficult trading conditions in history, local alternative business lender BCRS Business Loans has shared its prediction for what lies ahead for SMEs in the Black Country and wider West Midlands region.

It is approaching six months since the government announced that a nationwide lockdown would begin on the 23rd March to slow the spread of coronavirus.

Overnight, small businesses across the country were forced to either close their doors for the foreseeable future or grab laptops, computers and other essential equipment to work from home. Meetings via video call and baking banana bread became the norm, while Zoom and Microsoft Teams took centre stage as global household brands.

Lockdown was an incredibly tough time for everyone, but especially for small business owners who were desperately trying to keep their businesses afloat in extraordinarily difficult and unpredictable circumstances.

The government stepped in with dedicated initiatives to support businesses facing cashflow issues, such as the Job Retention Scheme, the Coronavirus Business Interruption Loan Scheme, the Bounce Back Loan Scheme, and opportunities to defer tax payments with HMRC. Some said it was too much; others said it was not enough.

But now, as the economy continues to re-open and some government schemes come to an end, what lies ahead for small businesses in the second half of this financial year?


We asked BCRS Business Loans’ chief executive, Stephen Deakin, if he thought the future was bright for small businesses and if there are any obstacles that are yet to be faced.

“In my opinion, the answer is ‘yes’ to both questions,” Stephen responded. “There is certainly a lot to be optimistic about but there will definitely be more challenges for small businesses to face in the coming months.

“At BCRS Business Loans, we are proud to have been supporting the growth of small businesses across the West Midlands region for the past eighteen years, which provides us with a unique insight into their trials and tribulations. Plus, we are an SME ourselves.”


Small businesses are optimistic

“In my experience, businesses in our region are optimistic about the future and have adopted the mindset of: ‘let’s get on with it despite the uncertainties.’


“Additionally, entrepreneurship appears to be on the rise! In the past two months, we have seen an increase in the number of loan applications where entrepreneurs are taking management buy-out opportunities.

“In many cases, small businesses have used the lockdown and subsequent interruption to normal trading conditions as a time to reflect and review their current operations.

“This will secure the long-term future of many small businesses, which is a major positive for the social and economic well-being of the West Midlands. However, unfortunately, this may result in more redundancies in the short term, exacerbated by the furlough scheme coming to an end in October. We question whether an extension to the scheme, particularly for certain sectors, is required.


“In my experience, redundancies are always a last resort for small businesses. Unlike large corporates, employees at SMEs are more than just a number – they know them personally – and therefore they will always try to safeguard as many jobs as possible. Fortunately, data from the Office for National Statistics suggests that the number of job vacancies is also on the rise, demonstrating further optimism from the business community.”


“In terms of future challenges, the most obvious is the uncertainty surrounding the rise and fall of coronavirus cases. Although a lockdown on a national scale again is very unlikely, there will almost certainly be more local ones. This is something that small businesses will need to monitor closely and consider contingency plans where necessary to mitigate the potential impact.

“A recent Business Barometer report from Lloyds Bank found that business confidence in the West Midlands fell by seven points in August, which is thought to be very closely associated with the then-predicted local lockdown in Birmingham, Sandwell and Solihull.

“At BCRS we will continue to show understanding and forbearance towards our viable customers, particularly where there is an impact of local lockdowns, and would encourage other lenders and SMEs to do the same.

“The ‘B’ word is going to make a reappearance in the coming weeks and months too, as the UK and the EU try to finalise future trading arrangements. The final outcome of Brexit – and the uncertainties it currently presents – is, of course, going to pose a challenge for businesses; not just those who import and export to and from the EU, but also those that trade with businesses in Northern Ireland. It may be worthwhile diversifying customer and supplier bases; perhaps taking this as an opportunity to support local businesses in the UK.

“There is further uncertainty about future funding sources for small businesses that have been affected by the coronavirus outbreak. With government-backed guarantees, offered to lenders under business loan schemes coming to end, there are real questions about whether businesses will be able to secure finance from traditional lenders to support their continued survival, or if they can afford capital and interest repayments at a time when cash flow is so stretched.


As a delivery partner for the Coronavirus Business Interruption Loan Scheme (CBILS), BCRS Business Loans and our trade association, Responsible Finance, are calling on the government to extend the loan scheme or create a second legacy scheme as businesses continue to reel in the disruption caused by coronavirus.

“Finally, possibly the biggest challenge will come in March 2021, when deferred tax bills are due to be settled with HMRC. Small businesses need to be mindful of this date so the amount due is included in forecasts and does not come as a surprise nearer to the time and cause cashflow issues.

“Although there are some challenges to overcome, my advice to small businesses at this time is to constantly review your internal and external environment, then take a considered approach and make contingency plans where necessary. 

“Remember, the phrase ‘cash is king’ is more important now than ever before, so updating your cash flow forecast on a regular basis will be essential. We have a list of top tips for your cash flow forecast on the BCRS Business Loans website.

“I have always believed that SMEs in the West Midlands are the best and most resilient businesses in the world, and this belief has been proven time and time again during the past six months.”


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