Finance Monthly September 2021 Edition

BUSINESS & ECONOMY - COVID-19 RECOVERY 42 www.finance-monthly.com The COVID-19 pandemic has sent shockwaves through the global business community. Whether you’re a high-street retailer or a global exporter, the impact of social distancing restrictions will have limited your ability to operate and trade to the best of your ability. When the full extent of the pandemic was first revealed, governments around the world offered generous loan and furlough support schemes in an effort to keep companies afloat. Yet the fact remains that the majority of businesses will have lost customers, suppliers, and partners during this difficult period, and it will take time for things to return to normal. The pandemic also provided the big banks with the opportunity to offer critical support, and many did so. From mortgage protection plans to low-rate interest loans, there are numerous examples of large financial institutions doing their best to support the recovery. Yet the fact remains that for small and medium-sized enterprises (SMEs) tier-one banking services have remained out of reach for many years. This problem first arose during the 2008 financial crash, which triggered recessions in major economies around the world. Credit lines were pulled, due diligence, background checks and borrowing estimates revised, all making it harder for smaller firms to secure credit and finance. "While it is commonly used by small businesses, however, traditional bank finance poses challenges to SMEs, in particular to newer, innovative and fast-growing companies, with a higher risk-return profile."