Banking and finance

Availability of working capital remains a priority for SMEs in 2022

Published on 13th Jan 2022

Asset-based lending and working-capital products are crucial as businesses recover from the pandemic and implement sustainability plans

Many businesses experienced a challenging 2021, with the Covid-19 pandemic, unsettled trading patterns and global supply-chain disruption contributing to an uncertain year. Dealing with these "new normal" day-to-day issues absorbs considerable management time as well as additional capital. 

Looking to 2022, there are a number of prominent opportunities and threats for small and medium-sized businesses to navigate. Some will be familiar from 2021, with decarbonisation and sustainability thrust back to the top of the agenda by COP26 and the wider public debate about our collective carbon footprint. 

A common thread that underlies and interconnects these issues is that the availability of working capital remains of paramount importance, and there will likely be a continued use of asset-based lending and working-capital products to support business plans in 2022.

Surviving and thriving

The Covid-19 pandemic continues to represent a significant challenge for many businesses. Responding to supply-chain issues and uncertain trading patterns has the potential to impact day-to-day cashflows dramatically and some sectors (notably hospitality and retail) remain vulnerable to changes in public sentiment and Covid-19-related measures. Not all is doom and gloom, however. Many businesses that operate in sectors with a digital focus – or who have adapted during the initial phases of the pandemic to become more digital-facing – have enjoyed a range of transformational opportunities brought about by changing consumer habits. Whether businesses are weathering the storm or seeking to expand, the common requirement remains access to working capital. 

Net-zero ambitions

As well as supporting businesses through economic recovery, working capital is also a driver of growth and change. Decarbonisation and sustainability across society and business topped the business agenda last year and will do again in 2022. 

The "Sustainable disruption: 12 decarbonising technologies for cities" report, written by Economist Impact and sponsored by Osborne Clarke, explores how technologies may be employed in cities across the world to meet challenging zero-carbon targets while remaining an attractive proposition for business. The report identifies the important role that businesses play in the transformation of city infrastructure and how their own practices will inevitably come under greater scrutiny from shareholders, investors and consumers.    

Recent British Business Bank research (Press Release - October 20, 2021 - British Business Bank ( suggests that small and medium-sized businesses remain in the early stages of transition towards meeting wider net-zero objectives to reduce carbon footprints. The research also highlights that the cost of decarbonisation is one of the main barriers for businesses to support net-zero action. 

Osborne Clarke comment

Several of our lender clients are accredited by the British Business Bank to provide the Recovery Loan Scheme alongside receivables-financing products in order to support viable applications from small and medium-sized businesses that are seeking financial support. We continue to see a strong appetite for receivables-financing products and solutions to support continued growth, in particular, in the fintech sector. We have also continued to support our corporate clients with the ongoing management of their working-capital products and exploring opportunities in the market for those looking to move away from traditional corporate facilities to those that may offer a more flexible solution based on an underlying and often under-utilised asset base.

Access to working capital and the continued proliferation of asset-based lending and receivables-financing products in the market offer an opportunity to businesses in 2022 not just to survive but also to thrive.

The continued availability of working capital to small and medium-sized businesses clearly remains of significant importance to support decarbonisation ambitions and to help unlock and then fuel transformative change. 

We look forward to continuing to work with our lender and borrower clients in 2022, and helping to support the provision of working capital for businesses to cater for both their immediate business needs and their longer-term ambitions.

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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