SMEs funder launches £40m facility to help firms survive testing times

Small businesses funder, Capify, has launched a £40m fund for UK SMEs to help them through the current difficult trading conditions.

It comes almost 18 months after the Altrincham-based business announced a £50m facility to help the sector recover from the pandemic.

The latest fund has been specially created in response to real and growing concerns about access to finance from traditional lending sources and the impact that has on SMEs’ ability to deal with the effects of inflation.

According to Capify’s Q1 2022 Confidence Survey, just under 60% of SME owners are now worried about the impact of rising costs and inflation on their businesses.

The survey, which featured the insights of 260 SME owners from a range of regions and industries, revealed the impact of inflation on cash flow and cash reserves – 37% of respondents cited cashflow as a major concern (up from 23% in Q4 2021), while more than half of the survey respondents (53%) were concerned about the levels of cash in the bank.

Also, 47% of respondents identify these working capital and cash flow struggles as the primary driver for seeking external finance. But 52% of those surveyed stated they would not be confident of securing that finance from their traditional banking partners.

The new fund aims to alleviate some of the potentially crippling cash crunch crisis and provide a much needed lifeline for businesses struggling with increasingly challenging conditions. The fund can also be accessed by businesses wanting to invest in their operations and realise their growth ambitions.

Funding of up to £500,000 will be open to SMEs across a range of sectors that are already trading.

John Rozenbroek, chief operaring officer at Capify, said: “Our most recent survey presented a very stark picture of the UK SME landscape.

“Whilst many businesses were optimistic about their potential to grow sales and headcount, there was a real sense that access to finance is becoming an increasing concern.

“These underlying concerns will have been accentuated by this period of inflation and the attendant price rises throughout the supply chain.”

As was the case in the aftermath of the 2008 financial crisis, demand for finance from SMEs is increasing across all sectors.

Mr Rozenbroek added: “As we saw in that last great recession, traditional banks restrict their lending criteria in uncertain times and make it difficult for SMEs to get the finance they so desperately need. Our new fund is a specific response to this gap in the funding landscape. It underlines that alternative lenders like ourselves will have a vital role to play in helping SMEs navigate these headwinds and allow them to capitalise on future opportunities.”