15th April 2020
Here are four ways to try and secure your business finances during coronavirus
The government have taken steps to try and support businesses in the UK, saying that they will do ‘whatever it takes’ to stand with businesses.
Together with Funding Xchange, we’ve outlined a few other ways you can try keep your business’ finances secure during this time.
Try to cut down on any non-essential costs you might have
First, take a look at your last bank statement. If you’re using Monzo Business, you can do this in your app. Tap Summary on your home screen (that’s the little pie chart in the top right-hand corner) and then Export & bank statements.
Next, separate your costs into four different categories. This can help you figure out exactly where you can try to cut down on spending.
You can split your business spending into categories with Monzo Business so you know exactly how much you and your team are spending on things like bills and expenses.
With Monzo Business you can even set a budget for each category, if you want to. Add notes and tags, plus easily search and filter transactions.
Here are the four categories:
– Spending that’s crucial to business operations.
This can be things like running the website if you’re a web-based business. These payments need to be prioritised over everything else!
– Costs that are important, but that the government might’ve offered help with.
This can be things like employees who can be furloughed or the business rates holiday the government is giving some small businesses for the 2020-21 tax year.
– Costs that aren’t important during coronavirus.
This sort of thing could be the cleaning services for your office or the money you might spend on team socials or events.
– Costs that can be delayed or rescheduled.
This sort of thing could be marketing campaigns or new projects you had lined up. Also things like office improvements and renovations.
Reach out to customers to let them know you’re still operating
Many businesses are under lots of stress right now, but it's still important to try to make sure you protect the money that you expected to get during this time.
If you’re a small business, calling your customers or sending an email that explains why you need their support can be helpful. Don’t be afraid of chasing up invoices that you’re owed either!
Think about how to reach your customers during this time
As well as cutting costs, it could be useful to think about the difference ways you can adjust your business strategy to the current crisis.
Fitness studios have been renting out fitness equipment and offering online courses and pubs are delivering Sunday Roasts to homes. Local taxi firms are providing grocery delivery services and Dyson are making ventilators for the NHS! Think about the different ways you can rethink what your business does do to help make some money and reach your customers during this time.
Try to find the government scheme that's right for you
The government has announced a range of initiatives to support small businesses throughout the coronavirus pandemic – including loans, grants and support paying staff. The government site provides a useful overview of what you can access and we’ve summarised it here too.
With the Coronavirus Business Interruption Loan Scheme (CBILS) small and medium-sized businesses can access loans of up to £5 million, for up to 6 years, backed by the British Business Bank. The government will cover the first 12 months of interest payments and fees from the lender, so you’ll benefit from lower early repayments. The scheme is being made available right now through over 40 lenders.
While Monzo’s not able to lend to businesses directly, we’ve teamed up with Funding Xchange, a credit broker. They work with multiple lenders to find the right funding for your business’ goals.
If your business is a limited company, you’ll be able to access Funding Xchange straight from your Monzo Business account.
Tap here if you’re on your mobile – or tap your profile picture in the app, and tap Business loans.
So you know, we earn a commission from them, but that doesn’t mean you pay more. You’ll pay the same as you would going direct to a lender. When getting a loan via Funding Xchange, Monzo Banks acts a credit broker, not a lender.
This blog post was written with Monzo and the original post can be found on their website here.