The Christmas buying season is currently underway for many of your company’s business customers, the MarketFinance team notes.
UK-based MarketFinance, an established online lender that recently raised £280 million in debt and equity and was approved for flex loans, writes in a blog post that customers in retail, hospitality and consumer-based sectors will be “expecting a boom in footfall, sales and December revenues.” But what happens after the Christman good cheer fades? Well then January arrives and these customers have to prepare for the first quarter of 2022.
MarketFinance further notes that keeping an SME on track for success and profitability this year has been challenging work. Your customers have faced an unpredictable pandemic, which may have led to “uneven revenues and poor cash flow.” But one of the most profound and disruptive challenges has been “the ongoing supply chain issues that many sectors have experienced,” the MarketFinance team notes.
They added that the United Kingdom’s supply chain issues are “unlikely to resolve themselves soon.” So, these logistical and operational problems “need to be factored into your client’s planning for 2022.”
The MarketFinance team added that the supply chain issues we’re seeing have “not come about because of a single cause.” There are “a multitude of factors that are feeding into these operational hiccups,” the company claims.
These factors include:
- Ongoing staff shortages – the pandemic has had “a pronounced impact on staffing levels, and these global staff shortages are predicted to continue well into 2022.” Staff sickness is “expected to increase over the winter period, and many sectors are still reeling from the staffing issues brought about by Brexit.”
- Brexit hold ups – being outside both the EU and the Customs Union has “created difficulties for British exporters and importers.” The mounting processes and delays “created by the UK’s exit has increased form-filling and slowed down deliveries.” For many it has “added to the overall costs experienced by UK businesses trading beyond our borders.”
- HGV lorry driver shortages – a lack of trained and experienced HGV drivers has “wreaked havoc on many supply chains.” EU drivers “weren’t tempted by the Government’s offer of temporary work visas and driver shortages are predicted to continue until at least Spring 2022.”
- High costs of raw materials – prices of raw materials have “risen steadily over the last year and are expected to carry on rising.” Materials like steel, timber and other construction and manufacturing basics are “hard to come by.” And this scarcity is “reflected in rising prices that will likely continue for the majority of 2022, or longer.”
MarketFinance has talked to 1,000 different UK businesses, to “gauge how well they’re coping with the current supply chain issues.” And the results of this survey “certainly seem to show that there’s a silver lining to the current supply chain cloud,” the company revealed.
A quarter or 25% of SMEs that MarketFinance spoke to “reported that their prices had almost doubled over the past 6 months, due to the rising global costs of raw materials.” But the majority of SMEs are “absorbing these increased costs and only a fifth are passing on the additional cost to their customers.” That’s “a good sign that SMEs see the value of these customer relationships,” the company added.
According to MarketFinance, “times are hard, and 2022 is likely to present many of the same challenges.”
Company CEO, Anil Stocker, stated:
“The current economic environment with rising costs is presenting some headwinds and headaches for SME owners but they are proving to be as resilient as ever. The vast majority have been thinking ahead and accounted for the longer term scenario, which will hold them in good stead to do business.”
SMEs and their owners will be looking to you and your firm “to help them get through any rough patches in 2022.” And, as their most trusted and valued adviser, it’s “important that you can be both innovative, proactive and assertive when it comes to offering your core advice,” the MarketFinance team added.
Helping customers stay adequately funded and capitalized will be key to your planning conversations for 2022. With the Autumn Budget announcement of an extension to the Recovery Loan Scheme (RLS) until June 2022, SME clients “have another viable route to funding.”
MarketFinance confirmed that it is an accredited lender under the Recovery Loan Scheme and can offer recovery loans to “eligible business clients that meet the current criteria.” Successful applications can “deliver between £50,000 to £350,000, 6 months of interest-only payments and a single fixed fee, capped at 4%,” the company noted.
For customers that require a cash injection to enhance their 2022 recovery and growth plans, the RLS is “well worth investigating as an attractive route to funding,” the MarketFinance team claims.