During the dire depths of blanket Covid lockdown, it was observed that most businesses quickly divided into three broad categories.
Those that did nothing. Head down, shut up shop, wait and hope it will all just blow over.
Those that adapted. Faced with barriers to normal market channels, they resiliently found ways of reaching customers via alternative distribution methods.
Those that changed. Blocked from any meaningful trading options, they dug deep, innovated and reinvented themselves through new products and services.
Which worked best? It’s a bit early to say. Back in those uncertain days of lockdown, however, all three options were rational responses to very irrational situations. Short-term fixes to see business through until normality returns.
Now, a more important issue is that short-term expediency is becoming a longer-term necessity. The pandemic has accelerated already evolving customer trends and habits, or changed them altogether. As a result, businesses need to change too.
The issue is that doing so may require potentially significant investment. Or at least a cashflow injection while trading recovers. The challenge, as Robbie Lander of local lending specialist Reto Finance sets-out, could be accessing funds in the face of a looming credit crunch.
‘We’ve already seen steps banks are taking as a result of the pandemic. Removing 95% loan-to-value mortgages, for example. And tightening other elements of their mortgage criteria to make releasing equity difficult when people need to do so. It’s about the banks’ attitude to risk, and less about meeting individual customer needs. If the computer says no, then no it is. And no ifs or buts – they simply won’t have the flexibility needed to lend you the money.’
The concern is that access to credit becomes a particular issue for small and medium sized Channel Islands’ businesses. Lending policies established with the UK market in mind may not suit local circumstances. And six month’s pandemic-affected trading figures won’t help the situation. Fundamentally, access to traditional sources of finance may be restricted at exactly the time it’s most needed.
Are there alternatives? Aside from raiding personal funds or selling the family silver? Local lenders such as Reto are one option. With a more flexible approach than the traditional banks, their smaller size, local market understanding and keenness to acquire new business places them as a very viable alternative.
‘We’re not pretending to be a bank, nor directly compete with them,’ Robbie elaborates. ‘But Reto already provides specialist loans and finance to a wide range of businesses. And is very happy to discuss lending requirements with any company or individual needing access to finance in these challenging times. It could be covering an investment in new IT infrastructure, for example, or making premises covid-secure. Or a means of releasing equity to cover day-to-day operations. We’ll ultimately take a locally-made decision based on what we see in front of us, not what the computer says.’
Advantageously, the application process is straightforward, decisions taken quickly and funds made available more or less immediately. Loans can be paid back over an extended period, or used to cover an interim bridging demand.
‘We can offer a short-term fix,’ Robbie concludes, ‘or long-term support. It doesn’t matter whether your business is coming back to life, exploiting new opportunities or becoming something different. Local lenders like Reto are there to help local businesses turn the new normal into a fully funded reality.’
To find out more about business finance options in Jersey and Guernsey, visit www.retofinance.com, email email@example.com or call 01534 886 900 / 01481 886 900.