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Does the Chancellor’s summer statement provide opportunity for UK businesses? TVAF Managing Director, Andy Wise, talks about the Chancellor’s creative plans and how clever asset finance management could see several key sectors grow, providing a much-needed boost for the UK economy.
Having closed down countless businesses on high streets, retail parks and industrial centres across the UK, nobody envied our newly appointed Chancellor as he delivered his summer update yesterday (8 July 2020), which had a clear focus on getting as many people back in to work as possible.
Whilst jobs were at the centre of his strategy (and with 9 million people currently on Furlough, that’s understandable), there are a number of points in the update which will have an impact on TVAF customers, so we wanted to outline some possible areas for growth based on the Chancellor’s statement and some examples of how we’ve helped other TVAF clients grow their business with clever asset finance management. As with any recession, there will be people who will profit from an economic downturn, so having some information to help you make good financial decisions could help you to be one of the winners of the forthcoming recession.
The £3bn investment towards creating green jobs will see schools and public buildings become more energy efficient. This should create additional work for those in the building, construction and energy services sector as they will be required to undertake the work. For construction businesses, asset finance to provide construction equipment could be the key to securing large-scale public sector contracts. Here’s some examples of construction equipment TVAF has secured for our customers over the last 12 months:
There is no doubt, the hospitality industry has been the worst hit sector of all, with many fast food and take-away outlets closing during lockdown. Social distancing measures might mean you need to run a different model, such as take-away instead of dining in. You might also need to change your kitchen around so that your workers can operate safely. However, it’s clear that the Chancellor is focusing on this area, with his innovative ‘Eat out to help out’ scheme launching on Wednesday 15 July.
If you’ve got a brilliant business model and you’re operating successfully in a one town, could that model work elsewhere? For example, one of our clients opened a successful leisure venue in Newbury and approached TVAF for asset finance for equipment, air conditioning and security systems for their new site in Reading. TVAF was able to provide a consolidated loan for this client after the bank was unable to provide the financial support they needed to get a second business launched.
Here’s an example of how we recently helped a father and son team get their pub up and running with asset finance for their bar and kitchen.
We think the Chancellor has been creative in trying to stimulate a sector that provides 2.4 million jobs. The VAT cut to 5% should be welcome news to business such as restaurants, take-aways and B & Bs. Publicans will be less thrilled with alcohol being exempt in the VAT reduction scheme (but we will leave that for another day).
Asset finance could help independent businesses if they spot a gap in the market and need to move quickly. A number of businesses could close, simply because of cash flow. If you have the funds available to make a purchase, clever asset finance management (such as buying a business and selling the assets back to yourself as we did for this client here) could allow you to invest in a business but carefully manage your cash flow by paying back the finance on the assets over a number of years.
Alternatively, you might need some cash flow to invest in new web technologies and apps which would allow you to offer online sales or home deliveries. Plus, a branded vehicle to get your deliveries to your customers. All of these initiatives could be funded through asset finance secured through an independent asset finance broker such as TVAF.
If you think that there could be an opportunity for your business, why not contact our team to find out more about how you could restructure your finances to ensure sufficient cash flow and get you in a good position should there be an expansion or acquisition that you’d like to make in order to expand your business.