Let’s talk about the global emergency that shook businesses right to their financial cores this year… COVID-19 is not just a pandemic to sweep the globe and take lives.
It took livelihoods with it too. It serves as a reminder (or call to caution) of what can happen to businesses (even the most resilient and well-rooted businesses) that do not have a sound financial backup plan for times of emergency.
As an entrepreneur in the UK, what can you do when your business finds itself in need of emergency funding? What if a health crisis sweeps the country, closing your business’ doors for an indefinite period of time? Or what if a natural disaster destroys your stock and business premises? On the flip side, what if the emergency is more of a time sensitive issue? Perhaps you need funding right now in order to invest in a once-in-a-lifetime-opportunity for growth. Where can you to turn to for the emergency business funding that you need?
How Can The Government Help With Emergency Business Funding?
With the Coronavirus having recently waged war on the world, all eyes have been on government bodies to see just what they planned to do to help out businesses that suddenly found themselves in a “financial pickle”, for want of a better term. In the UK, the government quickly stepped into action.
Emergency funding does not seem to be the norm for the British government, but it must be noted that financial support for struggling local businesses during the pandemic were and have been on the table from a very early stage. The government has been offering financial support for large corporations, small concerns, and even the self-employed. Seemingly, there is something for everyone.
Relief is offered for those who simply want to pay their employees, afford sick pay, pay their taxes, or simply receive a bit of business rates relief. A full list of the options that the UK government offered as part of this business emergency funding and relief can be found here. While the government does offer financial aid in emergency situations for businesses, it must be noted that the approval process is quite tricky. Both the approval and pay-out process can also be quite lengthy. Applications for emergency business funding from the government must be done via the official government website.
How Can Alternative Funding Help Your Business in Times of Emergency?
Alternative funding for business emergency loans are certainly available, but do come with a slightly increased interest rate. The benefits that come standard with alternative business funding are considered are that they are often faster and easier to get than high-street banks. As per SME Loans, these include:
- Unsecured loans that require no collateral or co-signatory.
- Loans are paid out quickly – often within 24 hours of approval.
- Credit score is only a small part of the loan approval process. Even those with a less than perfect credit score can still obtain an alternative business loan.
How Can High Street Banks Help with Emergency Business Financing?
High Street Banks do in deed roll out emergency business loans for companies experiencing financial strain. However, a high street bank loan is not particularly easy to get approval for. High Street Banks are all about credit scores. Of course, your financials also need to prove that you can easily afford to repay the loan when it is “business as usual” again. In some (or most) instances, collateral may be required as a safety net for the bank.
Of course, High Street Bank business loans typically come with reasonable interest attached, which is something appreciated, especially on a long-term loan. That being said, there are downsides to consider too. Business loans via the bank are not processed in a hurry and you might find yourself waiting for the paperwork and red tape to be addressed before you actually see any of the money applied for.
Weighing up all of the options and then selecting a funding solution that works best for your business is really the only way to go about acquiring emergency business funding. Take the time to draw up a pros and cons list and make sure that your final choice is convenient, affordable, and leaves you in the best possible financial position now, and in the future.