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Accessing funding in the current market

The impact of COVID-19 on industries has been varied. Some businesses are in unique positions of growth and other businesses, in sectors like hospitality, feeling like they are hanging on by a thread.

Stimulus measures were rapidly put in place to keep businesses afloat right at the beginning of the crisis. Recent announcements tell us the future of that support, with measures slowly decreasing and eligibility requirements tightened through to the end of March 2021. Some businesses won’t qualify for these incentives going forward.

While some businesses sadly won’t make it through the other side of COVID-19, it’s not all doom and gloom. The Global Financial Crisis (the GFC), gives us some key insights into what a recession may look like and the road to recovery.

The banks are offering support for their existing customers, so if you haven’t already, it’s definitely worth a good conversation with your bank. But if you’re looking to access funding from a new lender, this will be increasingly challenging. Traditional banks become more conservative in times of recession. However there are other options for funding outside the banks that are looking to invest. It’s worth putting your business through checks and balances to understand if you may be able to access alternative funding.

If you need funding, whether it’s for working capital or restructuring or whether your business is performing well and finance is required for growth or acquisitions, there’s a number of steps you can take to prepare and  maximise the likelihood of securing funding on the best possible terms. One example is preparing a detailed financial forecast including scenario planning. Ask yourself a range of ‘what if’ questions and map out scenarios for each of them. This gives lenders and investors more comfort of what shape your business will be in as a scenario unfolds and will help support their funding or investment decision.

Holly Stiles and Paul Gooley both Corporate Finance Partners at Grant Thornton Australia, know what lenders and investors are looking for even in uncertain times.

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