27th August 2020
Over the past few months, we’ve seen extensive changes occur within the small and medium-sized businesses sector. The Crowd2Fund client base has shown a reduction in defaults, providing hope that the immediate shock of the shutdown and potential implications for the longer term are being carefully mitigated.
There have been significant amounts of capital injected into the market for SMEs to help sustain businesses and support their pivot and future growth. There have been multiple, generous government schemes from grants, Bounce Back Loans, and Business Interruption Loans. The Furlough Scheme has outstandingly helped SMEs preserve their teams during low revenue periods. This stimulus has allowed the vast majority of Crowd2Fund clients to weather the immediate storm through a combination of restructuring loans, and also signposting businesses to emergency government support.
Market conditions are still risky, and this is one of the reasons why Crowd2Fund has used the time to further strengthen its proposition, including a full website refresh.
The challenge for SMEs will be to ensure that they commence trading again and achieve the required growth in the medium-term to service any additional debt.
We are encouraged to see what clients have been doing with the time and also the additional capital which has been used to prepare their businesses for a longer-term growth phase. These adjustments include revamping websites or adjusting supply chains. In addition to this, focusing on a global marketplace, coupled with a local presence.
We must also bear in mind that many sectors have significantly outperformed normal market conditions such as HealthTech, eCommerce, Food Delivery etc. This is where the dynamic nature of the SME market really begins to shine along with the passion of the British public and awareness of the importance of job creation, but also the new products and services they bring.
In the medium-term, we hope that businesses have fortified themselves to navigate the risk of a second wave and also an economy without government stimulus. We, at Crowd2Fund, believe in the ability of entrepreneurs and believe that businesses have the ability to manage this risk.
The risk has now shifted to the longer-term, and being able to achieve the required growth needed to service the additional debt. It is of our opinion at Crowd2Fund that we will experience a bounce during 2021, where the time and money invested during 2020 will start to reap rewards – especially if businesses also embrace the new international trading opportunities that Brexit presents.
Crowd2Fund also offers multiple investment products which can be used to help the businesses get the growth needed; such as equity investment, or revenue-based debt investments – so some thought is needed within the SME financing space to continue to innovate dynamic products that are suitable for the needs of the businesses they serve.
We are focused on providing a global framework and platform to facilitate SME business growth, as we exit the age of digitisation and enter the new age of the global entrepreneur.
Past performance and forecasts are not reliable indicators of future results. Tax treatment of any of the investment offers will depend on the individual circumstances of each investor and may be subject to change in the future. If you are unsure about any aspect of the information provided by the company, you should seek advice from an independent financial adviser. Do not invest more than you can afford to lose. Investing in start-ups and early-stage businesses involves risks, including illiquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio. Investing in start-ups may expose the individual concerned to a significant risk of losing all of the money or other assets invested. Peer to business lending through Crowd2Fund is not the same as holding a bank or building society savings account. When making a peer to business loan, your capital lent to a borrower is not covered for compensation in the event of a loss by the Financial Services Compensation Scheme. It may prove impossible to recover all or part of the loan by calling in the business assets held as security on that loan. Reward and Donation funding types are not regulated by the Financial Conduct Authority Crowd2Fund Limited is authorised and regulated by the Financial Conduct Authority (FRN 623683). Crowd2Fund Limited is registered in England and Wales. Registered No. 08472687 Registered Address: 242 Acklam Road, London, W10 5JJ.
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Past performance and forecasts are not reliable indicators of future results. Your capital invested is not covered for compensation in the event of a loss by the FSCS. Tax treatment will depend on the individual circumstances and may be subject to change. Please see our Risk section before making an investment decision.