Some businesses have risen above challenging circumstances. What can we learn from them?
The year 2021/22 has been tumultuous: lockdowns, changes in government schemes to keep businesses afloat, furlough coming to an end…
At Swoop, we asked our team what they thought the biggest issues had been for their clients in the last 12 months, how they think those challenges were overcome and what SME founders should do to prepare for the coming financial year.
Changes in the market mean that it pays to be vigilant for better deals
Seb, a Senior Funding Manager at Swoop said that the changes in rules of CBILS and RLS had caused confusion among some customers:
“When repayment holidays for CBILS loans came into effect, many businesses realised that the loans they had taken out as a result of COVID-19 were more expensive than they had to be. I worked with a construction company that was paying 12 percent on a £150k loan. When it came time to start paying back the money, the shock of the new outgoing had the customer asking whether they couldn’t get a better deal elsewhere.”
Thanks to new products on the market, the customer was able to switch to a better deal.
Read more about how Seb helped a customer save £10,000 over the course of the loan here.
Complex property deals have been a challenge
In Swoop’s Commercial mortgage department, AnnMarie has been facing a couple of challenging cases that illustrate how cautious lenders have been in the last year. AnnMarie told us:
“The lending market is shifting in this post-pandemic world and it is difficult for a would-be borrower to keep abreast of. I had one customer who was new to the world of buying commercial property. He was competing with other, more experienced buyers for a particular property. Fortunately, we were able to quickly find him a lender aligned to his particular set of circumstances that meant his inexperience did not preclude him from competing and ultimately being successful in the purchase.”
AnnMarie says that this may change:
“There will always be complex cases, challenging circumstances and an element of timing involved in any commercial property purchase. Over the coming year we will see that rising interest rates might make some buyers more cautious and lenders to stress test repayments more aggressively – but lenders continue to evolve their offering to ensure solutions fit the current economic circumstances we face and buyers can still move forward confidently to take up commercial opportunities in the market, utilising these solutions.”
Finding blended funding to pivot
The impact of COVID-19 caused many businesses in the hospitality sector to pull down the shutters. But for The Brook, the growth of interest in plant-based meals was too good an opportunity to miss. Andrew, Head of Business Solutions at Swoop, says that the company tapped into several trends to achieve growth:
“Vegan and plant-based eating have become more popular, as has home delivery for meals. It made absolute sense for The Brook to reach hungry customers through a delivery service at a time when they couldn’t go to a bricks-and-mortar restaurant.”
Thanks to funding from Swoop, The Brook’s products are now available through supermarkets as well as through home delivery. Andrew says that many businesses don’t take advantage of changing circumstances:
“Change is always happening and if you spot a trend it can be tempting for a business owner to say ‘that wouldn’t work for us’. But the truth is, it might actually be a huge opportunity, especially if you can get into a new space before competitors realise its potential.”
You can read about how Andrew helped The Brook here
- If your business took emergency measures for short term survival, these may no longer be right for your growth going forward. Review your borrowing and investigate whether there are alternatives to your current situation.
- Lenders can be hard to predict: brokers who know the funding landscape will become more valuable as their expertise will become crucial to getting a successful application
- Trends arise for a reason; businesses that can pivot to capitalise on a trend will be at an advantage.
What have you learned from the last 12 months? Share them with Swoop – email firstname.lastname@example.org