With the Government providing backing for the Bounce Back Loan Scheme, a huge volume of small businesses will now have access to cheap money, but leading business growth speaker, Dean Seddon, warns that it will take more than loans to help small businesses recover. “Customers attitudes have changed. If you are an online business, to some degree you will return to normal in time and so you need money just to get through. But for the businesses that need customers to show up, it is going to be a very challenging year ahead.”

Whilst the Government is slowly reducing the lockdown measures on society, peoples’ fear of COVID-19 hasn’t shown any signs of abating. In recent polls, the public have felt the easing is coming too soon.

“We have hundreds of thousands of small businesses – from caterers, event managers, training companies through to hair and beauty salons – all of which may be able to open in the coming weeks. But will the custom be there? It’s unlikely. We are not seeing widespread confidence from the public that they would quickly return to events and visiting businesses. It is likely the case that being ‘open for business’ may mean ‘open but not trading’.”

Dean is not alone in his concern. Thousands of businesses across social media are saying similar things, concerned that it may take six months before they return to normal.

In a recent survey, conducted by Maverrik, 39% of respondents believed their business would not get back to full operation until September, with 14% saying 2020 had been effectively written off.

The majority of the UK workforce is employed in small businesses. Whilst major retailers and brands get all the headlines, as much as 84% of the private sector workforce is employed in a SME.

“What’s worrying here is that effectively for most small businesses the Bounce Back Loan Scheme may just be funding their losses. This means in 2021, when the loan payments become due, not only do they have to be back to 2019 levels, they now have to find the money to pay down their debt.”

In the early stages of the COVID-19 outbreak, many economists believed the UK would bounce back from the pandemic by early 2021. If the economy doesn’t bounce back as expected, the Bounce Back Loan Scheme may see higher defaults and, ultimately, the Government may have only delayed the inevitable for many small businesses.

“What would be good to see from the Government would be another targeted injection of grants. It is very costly but, in the long run, will prevent unemployment rising and will speed up the pace of the recovery. If the Business Interruption Grants were given a second lease of life, this would massively change the small business landscape. I just hope Boris Johnson meant it when he said the Government would stand behind business.”

Dean believes there is still a need for bold action from central government to make sure that the virus doesn’t create a contagion of failure in the UK’s small businesses.

Estate agents can now open, property viewings take place and surveyors and removal firms can now operate, effective immediately as the government set out plans to reboot the housing market yesterday.

Housing Secretary, Robert Jenrick, said the activities must still be carried out under social distancing rules, “Our plan is clear, we will enable people to move home safely, covering each aspect of the sales and lettings process, from viewings to removals… This critical industry can now safely move forward, and those waiting patiently to move can now do so.”

The plans included allowing tradespeople to operate, provided they also follow the strict, social distancing rules. Among these changes in measures, the government outlined changes to the house building sector:

• Builders to agree more flexible working hours with local authorities to help ease pressure on local transport and communities
• Enabling local authorities and builders to make public planning applications through social media
• Allowing smaller developers and builders to defer payments to local authorities to help ease cash flow

These new measures will test whether there is the anticipated ‘postponed’ demand from a wave of buyers and renters, many of whom have had their plans put on hold just before the pandemic hit.

Jonathan Hopper, chief executive of property consultants Garrington Property Finders believes the demand is still out there from buyers for new property purchases.

“The lockdown may have halted conventional viewings, but there are plenty of signs that some would-be buyers have used the past six weeks to ‘window-shop'” he said.

The start of the Covid-19 pandemic saw property buyers flee the housing market, which led to a 70% drop in buyer demand over the course of just a few weeks and rental demand down by over 42% since the start of March, according to Zoopla. The government estimated more than 450,000 buyers and renters had been unable to progress their plans to move since March.

Only time will tell on what the market will now do following the lifting of these restrictions, many experts believe there could be a short-term spike, followed by a longer-term dip as the housing market takes a chill from the recession.

Blackstone Group is the largest alternative investment company in the world. The firm specialises in private equity, credit and hedge fund strategies to generate huge profits for its funds. The company, as of the beginning of April 2020, has finished raising approximately £8,000,000,000 ($10,700,000,000) which will target European-based property investments.

This grows the liquid assets of the firm, specifically earmarked for property investments, to just under £23bn. According to Bloomberg, this is the largest private equity capital raising since the outbreak of the coronavirus pandemic.

“Our scale and reach allow us to put capital to work strategically during this period of elevated volatility… The significant demand for the fund is testament to the confidence our investors have in our ability to deploy strategic long-term capital to assets and businesses across Europe.”

James Seppala, Head of Blackstone Real Estate Europe

It is likely that this fund won’t be directly invested into property-based assets, but rather to acquire property companies or trusts which own significant amounts of commercial property. We see this from Blackstone’s previous investments, such as its acquisition of Dream Global Real Estate Investment Trust which was finalised in December 2019, adding office and industrial property assets in Europe to its varied portfolio of investments. Blackstone’s property portfolio is currently the largest property portfolio in the world.

Like many other landlords, Blackstone has had to communicate with it’s tenants across the world, in an attempt to work with them during the COVID-19 outbreak. In addition, many private equity firms, including Blackstone, have had to help protect the companies in their investment portfolios by providing capital and credit to keep them afloat.

Citing a private equity survey by CIL Management Consultants, only 4% of investors see the current financial climate as an opportunity to buy or enter the market.