In the UK’s third national lockdown, the country has found hope in the national rollout of the Oxford University / AstraZeneca vaccine, begun on Monday 11th January. In the fight to drag the nation back to her feet and back to work, Prime Ministers old and new have called again on the NHS and her pharmacies and now the armed services, to enter the fray in the fight back against the Coronavirus.

Community pharmacies under pressure

Last week former Labour prime minister Tony Blair published a paper for the Institute for Global Change. The paper described the need for the current government to expand the COVID-19 vaccination programme to,

Beyond the normal function of dispensing medicine to their community, local pharmacies have spent the winter delivering vital flu vaccinations and critical supplies such as handwash, sanitisers and PPE. Local chemists have continued to find a way to operate amongst social distancing measures, in cases even adopting door policies to limit the number of patients and patrons in store. They are now being called upon again to carry the fight back against Coronavirus, playing what Boris Johnson called,

Speaking at Prime Minister’s Questions, Johnson went on to praise the knowledge, professionalism and safety standards of local pharmacies. (Watch Prime Minister’s Questions here).

Currently the largest vaccination programme in the world

In an effort to beat the virus and restore the nation the UK, led by the UK Vaccine Taskforce, has pre-ordered more vaccines per capita than any other nation on earth. 357 million vaccinations, provided by seven suppliers – enough for five doses per person.

With more than 200 pharmacies currently approved to deliver vaccinations and more being assessed daily, pharmacists in the vanguard of the programme have described their pride in playing their part.

Working capital is more vital for pharmacies now than ever before

To deliver what the government has described as a 24/7 rollout of the vaccination, pharmacies need the working capital in place to work at the optimum level. A working capital facility offers pharmacists the ability to access cash as and when they require it.

Running out of cash is a danger for any business scaling up their activities in the face of a change. This is not only a business concern, but with the national spotlight on the vaccination programme, local pharmacies need to be attuned to their own mental health and that of staff, all of whom are under enormous pressure. A cash buffer in the business – even if not used – can help to alleviate some of that worry and pressure. A proportion of the money can also be used to support staff members and ensure that they remain resilient and able to cope in this incredibly stressful time.

The opportunity to drawdown as little or as much of the fund from month-to-month will be vital, as pharmacies play their part in the national vaccination programme.

Why use Woodsford RxBridge?

Woodsford RxBridge has many years of experience in supporting UK pharmacies and can help a pharmacist to immediately access up to 4x their monthly NHS revenue to meet working capital needs.

A Woodsford RxBridge facility offers a tailor-made solution for the challenges that a lot of pharmacy businesses are facing.

Throughout 2020 the dental industry has endured as many setbacks as any business. Fully three months of lockdown throughout the Spring and Summer of 2020 has left UK dentists with an enormous backlog of patients. Yet, despite the COVID19 pandemic, dental workers have gone above and beyond to service patients in their surgeries and even on video conferences. The NHS itself has created 650 additional dental hubs to support patients throughout COVID-19.

The real challenge is yet to come, as 2021 progresses and the post-pandemic landscape takes shape, dentists move to reduce the number of outstanding patients and procedures.

Paramount to the survival and success of dentists in the post-pandemic landscape is the means to operate safely and successfully as a business and to continue to meet the requirements of the backlog of patients. As such, a ready supply of working capital should be at the top of the list of priorities for every practice.

The challenge of COVID-19

All of the issues already facing NHS dentists have been brought to light and accelerated by COVID19. Practices across the UK have been hobbled by the restrictions rightly imposed in the form of safety protocols, as a result of the pandemic.

Compounded by the imposition of three periods of national lockdown and, perhaps more importantly, the widespread national fear of a potentially fatal airborne virus that is passed when in close contact with another person.

Three key factors influenced the statistics from the British Dental Association’s annual report in 2020:

– Surgeries were unable to operate for up to three months of 2020
– Additional safety and cleaning protocols decreased the number of available appointments in a single day
– And patients either could not or chose not, to make and attend appointments as a result of the pandemic.

The result of the latter was:

Unwarranted criticism

UK dentistry found itself in the eye of a very public storm in February 2020 following the report of the national watchdog Healthwatch. The report led by Sir Robert Francis QC described a 452% rise in calls and complaints about the industry throughout the first peak of the COVID-19 pandemic in the summer of 2020. At the heart of the issue is the challenges constantly faced by NHS dentists in the requirement to service NHS patients efficiently, while simultaneously operating successfully at a commercial level.

Healthwatch reports on NHS dental practice

Throughout 2020 over 1,300 dental patients were surveyed by Healthwatch with headline-grabbing results.

At first glance, and without context, the statistics seem damning. Stories from the research ranged from patients being forced to either pay for private dental care to even pulling their own teeth.

The underlying challenge to UK dentists

Beyond the clickbait, the report tells the story of an industry with a massive pent-up demand caused by the pandemic and a history of years of structural challenges.

Dentists have been criticised for having prioritised private care or alternatively, having asked patients to pay private fees if they require treatment. The fact remains that dental practices need to continue to operate successfully as businesses, otherwise they won’t be able to service anybody, be they NHS patients or private.

Pushing back on the report and highlighting the challenge faced by UK dentists, Chairman of the British Dental Association, Shawn Charlwood expressed his concern and frustration that the NHS pays too little attention to the needs of a dental practice to function as a business in its own right.

It is imperative that every dentist sets themselves up for success in 2021. The working capital requirements of the industry will be bigger than they have ever been as practices will simply require more of everything to operate and meet the pent-up demand for treatment.

As the vaccination programme continues to roll out across the UK, with schools re-opening in March, could the worst of the pandemic be behind us?

Dare we even ask, could it really be back to business as usual in 2021?

eCommerce was the business success story of 2020

Whilst COVID-19 heightened uncertainty everywhere, one trend became clear:

The almost overnight speed of digital adoption throughout the UK, and the meteoric rise of eCommerce as a result.

Commentators everywhere described the acceleration as five years of advancement for the eCommerce industry in the space of just six months.

Catching up with online retail in 2021

The progression to online retail isn’t really news. Alongside the ongoing story of the decline of Britain’s high street, it’s been told since the advent of the internet – surely for at least the last ten years, if not longer?  

 The rise and rise of eCommerce has changed the retail landscape. On one hand, it has created stars, regaled with fame and fortune.  On the other hand, with all eyes on the sector, both the national media and government seem to be out for blood. eCommerce is still a young industry and is experiencing growing pains like any other.  

Regulation – Boohoo and supply chain  

The Manchester-based online fashion giant Boohoo has received fierce criticism over its approach to sourcing. As a result, Boohoo’s share price plummeted to almost half in 2020 following an investigation by the Sunday Times.  

Based on this investigation, the Sunday Times published and outed, a number of UK-based factories in the Boohoo supply chain who were paying workers as little as £3.50 per hour, a long way below the UK’s minimum wage of £8.91.  

The scandal escalated to the highest echelons of the UK government and drew the attention of Home Secretary Priti Patel. The home secretary insisted that the eCommerce retailer “must step up and take responsibility.” 

In the lead up to Christmas, Boohoo founder, Mahmud Kamani explained,  

In February 2021, fast fashion brand Boohoo gave its British suppliers in Leicester until March 5^th to,  

As a fast-growing marketplace, it’s clear that Boohoo were scaling quickly to meet demand. Yet managing a burgeoning portfolio of merchants places huge demands on their systems and processes. 

Working capital is not solely for securing the best possible deal from a supplier, it also enables businesses to invest positively in their process and practice – working capital funds growth. 

Taxation – Retail calls for 1% sales tax for online retail  

In February 2020, no fewer than eighteen supermarkets, retail property owners, and CEOs of high street chain stores called on chancellor Rishi Sunak to overhaul the current tax system and put them on a level playing field’ with eCommerce.  

 This is unsurprising from an ailing traditional retail sector that has been hit hard by the pandemic. 

 While eCommerce has soared in 2020 – Amazon alone reporting that UK sales have risen by 51% to the tune of £19.3 billion – the giants of online retail and big tech have drawn the attention of the world’s media and lawmakers for their minimisation avoidance of paying taxes.  

It’s fascinating to see such rivalry between traditional retail and eCommerce emerge so publicly. Online retail has experienced exponential growth, with that comes scrutiny.  

 In our recent article ‘Global racketeering online’ we explored the potentially darker side of eCommerce.  

 For the giants of the industry, the independent online retailer, or the eCommerce merchant selling goods on a marketplace, a heavy dose of taxation and regulation can fast become a working capital issue.  

 Meeting new financial requirements, or if the demands on business’ cash suddenly change, it can prove more costly than simply paying taxes. Especially if it means that a business can replenish stocks in a time of high demand.  

Try our eCommerce Calculator

The availability of working capital (cash) allows merchants to capitalise on good deals from their suppliers, which means they never run out of stock and can invest in strategies for growth.  

 Woodford TradeBridge has launched a working capital facility specifically for online merchants. 

Learn more: How it works   

 Use our quick calculator to estimate the growth in GMV that a typical merchant might achieve with our eCommerce Merchant Finance solution. 

 Find out how much you could borrow.  

Expensive problems drive great innovations  

If necessity is the mother of all invention, there’s no doubt that the key to the unbridled success of eCommerce are the extended periods of government-imposed lockdown throughout the world.  

 Online retail was ready to be a solution to the world’s problem.  

 What about the problems caused by the solution?  There’s a great distance between revenue and the bottom line of every balance sheet.  

 While online revenues soared in 2020, online returns were up as much as 70% from 2019 and this is an astronomical expense for the online retailer.  

 Industry executives told the Wall Street Journal, 

Innovative technology solutions can have hidden costs 

Among other retailers, Amazon and H&M have started testing technology solutions to drive efficiencies, and deliver made-to-measure garments. 

A couple of the solutions involve:   

• uploading a 3D body scan that a customer can take using an iPhone  
• simply answering an online questionnaire with the customers measurements  

A bespoke pattern will then be created and sent directly to a factory where garments can be made to a bespoke specification. This also demonstrates an even greater investment in customer experience.  

 At this scale, customer returns could so easily move from being a working capital issue to THE working capital issue for online retail in 2021.  

 The payment cycle for a marketplace can take between seven to thirty days to cover exactly this circumstance. If an online retailer has a surge in demand, working capital (cash) continues to re-stock and meet the demand whilst they wait for the funds from their sales to clear. It will be vital to ensuring a successful 2021. 

For more information, get in touch with one of our experts.

The Coronavirus pandemic has hit traditional high street stores particularly hard, but it’s had the opposite effect on tech giants like Amazon, Google and Facebook.

Amazon UK sales increased by 51 per cent in 2020 to £19 billion as shoppers shifted to online delivery for their essentials. But the company pays little corporation tax – just £14.5 million in 2019.

This has prompted Chancellor Rishi Sunak to declare war on Amazon, and other eCommerce stores that have profited from the pandemic.

With eCommerce stores excelling in the pandemic and traditional high street stores struggling to keep their head above water, how will the broken economy survive? Will eCommerce ignite economic recovery post-COVID? And what part will till-less stores play as the story pans out?

The Amazon situation

COVID-19 has had a devastating impact on traditional stores and independent businesses such as small online retailers.

In order to create a level playing field for all retailers, Chancellor Rishi Sunak is considering introducing two new tax rate regulations, as well as 30 other planned tax changes that are to be revealed this month.

Rishi Sunak, the Chancellor is rumoured to be working closely with US Treasury chief Janet Yellen on new “Amazon Tax”. The move will be an agenda item in the G7 summit in Cornwall in June 2021.

Sunak hopes to have a deal by the summer which will force multinational “click” firms to hand over fair tax on their earnings.

Tax is an expense that Amazon, like many global firms have sophisticated methods to minimize. Many multinational corporations often have entire off-shore operations dedicated to the practice of minimizing their taxes, which makes pinning down their full revenue even more difficult.

Sunak’s first attempt to target Amazon was a flop after former US president Donald Trump fiercely rejected the proposal. With Joe Biden’s arrival in the White House, new hopes have been raised that action can be agreed to create a level playing field for all retailers.

‘Till-less’ stores in London – the way of the future?

In the first quarter of 2020, Amazon started to offer its till-less technology to high street stores, just two years after Amazon launched its own till-less store, Go Grocery chain. The first till-less store has also opened up in Ealing, West London this month, with customers reporting a seamless shopping experience.

The Just Walk Out system has been adapted for other retailers, thus allowing high street shoppers to simply register a payment card on entry, and that card will then get automatically billed as they leave.

What does this mean for the high street?

Realistically, smaller retailers are a long way from moving to a till-less system en masse. Instead, with Amazon introducing its pioneering technology in the high street, they’re stealing even more market share. The possibility of a level playing field for smaller retailers and brands begins to feel even more like a pipe dream.

The Spring Budget 2021 and plans for recovery

Chancellor Rishi Sunak is attempting to identify other ways that might fuel economic growth.

The Chancellor announced in the Spring budget 2021 that the Coronavirus Job Retention Scheme, more commonly known as the ‘furlough’ scheme, has been extended until 30 September 2021.

The furlough scheme takes pressure off smaller stores who might not be able to pay the full wage of employees but still want to keep their staff.

More importantly, though, Sunak announced that there would also be the introduction of a business rates relief scheme.

The scheme aims to provide relief for traditional bricks and mortar stores during the COVID-19 pandemic by freezing 100% of business rate bills for the first three months of 2021.

This will offer a vital lifeline for businesses who are still having to close, as the national lockdown continues and the public waits for the NHS to finish vaccinating priority groups.

Looking beyond the UK government’s attempts to refuel the UK economy, could there be other ways that get the country back on track? And are Chancellor Rishi Sunak’s efforts enough to create a level playing field for all retailers?

eCommerce to fuel economic recovery

The coronavirus pandemic has turned the economy of the United Kingdom upside down.

The Chancellor’s 2021/22 spring budget aims to fuel the recovery, partly through schemes introduced to provide financial aid for traditional high street retailers.

But with the tide of eCommerce rising so high, growth in this area dwarfs the recovery of the high street.

eCommerce start-up growth

The pandemic has accelerated the move to online shopping while also triggering a shift in the types and number of products that are in demand.

The rising demand has benefited eCommerce marketplaces and the trend is set to continue through the recovery period.

But for marketplaces to grow, they need a ready supply of merchants on their platform.

There is a need for early-stage merchants to seek advice and support, and in particular to set up cash flow forecasts, to understand the impact of working capital on their ability to buy stock and respond to market demand.

Planning ahead to pay tax bills is part of this, and the Chancellor’s initiatives in the Spring Budget will help. But the taxes themselves are only one factor for merchants, especially in the early days. It’s more about planning, cash forecasting, ensuring they have sufficient working capital – and understanding business finance.

Capital that benefits the marketplace and the merchant

A Woodsford TradeBridge facility can benefit both the marketplace and the merchants.

Marketplaces need to focus on securing more sticky supplier relationships as they grow, so that the merchants are loyal and have the capability to scale as needed.

A Woodsford TradeBridge facility can benefit both the marketplace and the merchants.

Marketplaces need to focus on securing more sticky supplier relationships as they grow, so that the merchants are loyal and have the capability to scale as needed.

Additionally, they need to incentivise merchants to do two key things:

Both initiatives require merchants to continue to invest in their business and to commit capital to innovate and finance stock in the marketplaces warehouse.

It’s not just up to marketplaces to facilitate a strong relationship with their suppliers though.

Merchants must also nurture that partnership.

Merchant growth leads to marketplace growth

Growing merchants need working capital in order to keep investing in their business, so that they can continue to meet rising demands.

Sometimes these demands aren’t met, because merchants run out of cash during peak seasonal periods and miss out on potential sales.

The right type of merchant finance facility allows merchants can solve these bottlenecks and continue to grow without cash flow concerns.

They’ll have the working capital they need to secure stock, create a more diverse portfolio of products, and to improve delivery time to customers.

How Greensill disrupted the boring supply chain finance industry

Globally the market for supply chain finance has undergone a period of sustained growth over the past decade. In 2020, global supply chain finance volumes grew by 35% to a total value of $1.31 trillion according to BCR.

Supply chain finance, by definition, involves a company entering an arrangement with a lender (often their bank), to allow suppliers to be paid early for their invoices and/or delay their own payment obligations. This creates additional working capital for both the company and their suppliers and is all charged at very attractive interest rates based on the superior credit rating of the buying company.

For decades supply chain finance, or reverse factoring,  has been the territory of the major banks and was seen as very much less exciting than other fast-moving, high yield forms of investment. Until that is, Greensill arrived with their spectacular alternative to traditional supply chain finance lauded by both investors and businesses all over the world.

Its charismatic leader Lex Greensill was on a quest to harness the potential of supply chain finance and to democratise access for underdogs across the globe, like his own family farming business. Along the way, he collected accolades, praise, and government access. Even the honour of a CBE.

Greensill delivered two seismic shifts to the traditional world of supply chain finance:

Firstly, by packaging the receivables generated via his programmes into a financial asset for investors (first via GAM and then via Credit Suisse) he created a new, higher-yielding asset class and a deep pool of investors hungry for new funding.

Secondly, he utilised this new structure, together with trade credit insurance, to deliver vast levels of funding to sub-investment grade clients, who drove both the volume and yield necessary to make the whole structure work.

And it worked brilliantly. Until it didn’t.  

Why Greensill failed

Greensill was encouraged by piles of Softbank money and the promise of multibillion-dollar valuations at IPO, to revolutionise a fundamentally safe but boring business.

As one industry wag commented,

So where did it go wrong?

While it was no secret, the sheer scale of Greensill’s credit exposure to sub investment grade clients has surprised most industry insiders. Billions of exposure  to clients that were in some cases, fundamentally uncreditworthy.

Of course, credit defaults are an inevitable part of the business of lending money. It is true in business (as in life) that if you use your insurance, it will either get very expensive or you will lose it. So when throughout 2019 and the early part of 2020, Greensill’s name kept appearing on the creditor list of almost every high-profile corporate failure, the belatedly revealed refusal by Tokyo Marine to renew their policy, came as no surprise.

It has also been revealed that many billions of funding provided to two very large clients was based on a third Greensill innovation known as “Future Receivables Funding”.

Just to be clear…this is not supply chain finance in any guise. In fact, it is known as ‘Fresh Air Invoicing’ and is something that most lenders would consider fraud.

The high-risk strategy that he took has now been completely exposed. But if Greensill had succeeded in his quest, he would have been revered as a business genius rather than reviled in the press as the initiator of a ponzi-like financing scheme whose demise will wreak havoc on many real-world businesses and their employees.

The importance of relationships in global supply
chain finance

Greensill was fatally flawed because it overlooked the most fundamental factor in supply chain finance – the trust between lender and client.

The goal of both must be the successful delivery of the client’s product to their customer, and a well-designed supply chain finance programme will provide the sustainable source of liquidity that is essential to achieve this aim.

Supply chain finance is not a magic money tree upon which an industrial empire can be built. It requires robust foundations that reflect the best in business practice.

The importance of non-traditional lenders in global supply chain finance

The final losses to be borne by investors, savers, governments, and insurers from the collapse of Greensill will be measured in the billions. However, Greensill counted for a relatively small piece of the global supply chain finance market and operated in a way that was quite unlike the rest of the suppliers.

We don’t expect a major impact on the supply chain finance market, except for businesses in the global commodities sector, where the original problem remains.

Unless you are amongst the top tier of investment-grade businesses, traditional lenders have prohibitive lending criteria, particularly when operating in far-reaching jurisdictions or non-traditional commodities. Ironically these are precisely the areas where a smaller, expert company like Woodsford Tradebridge can offer the most value.

To find out whether a Woodsford TradeBridge facility could be an option for your business, contact us today.

After 5 years of funding eCommerce merchants via marketplace programmes, Woodsford TradeBridge
has launched a working capital facility directly to
online merchants

Woodsford TradeBridge’s online merchant finance is purpose-built for independent eCommerce retailers that sell products through marketplaces, via their website, or in a combination of both.

A Woodsford TradeBridge facility supports online retailers to experience exponential growth by ensuring that they always have access to cash.

Learn more.

Try our eCommerce calculator

Use our quick calculator to estimate the growth in GMV that a typical merchant might achieve with our eCommerce Merchant Finance solution.

Find out how much you could borrow. 

Funding eCommerce growth

The availability of working capital (cash) allows merchants to negotiate the best terms from their suppliers, which means they never run out of stock and can respond quickly to surges in demand.

An online business’ growth can often be slowed down by not having access to vital working capital.

Learn more.

With instant access to working capital, merchants can experience exponential growth by capitalising on every incremental increase in demand, ensuring that they always have the supply (stock) to meet it.

Learn how our client experienced 80% growth in 2020.