News & Events
What steps can I take to protect my business from the impact of the COVID-19 pandemic?
Across the firm, we are continuing to receive many enquiries from businesses who have been adversely affected by the COVID-19 pandemic, many of which relate to their resilience and survival during the current lockdown and its gradual easing.
There is no doubt that businesses are struggling to survive, so what steps can you take to protect your business and where do you start?
Government initiatives
The first port of call should be the government introduced measures, introduced to help businesses. It doesn’t matter if you are a SME, limited company or self employed individual, you may be eligible for one or more of the following support packages:
- Cash grants of up to £25,000;
- Wage payment subsidies under the Job Retention Scheme;
- Covid Business Interruption Loans (CBIL);
- COVID-19 Corporate Financing Facility;
- Bounce Back Loan scheme;
- Three months business rates holiday;
- Statutory Sick Pay rebates;
- Deferment of VAT and self assessment tax payments;
- Self employment Income Support Scheme;
- HMRC will entertain Time to Pay arrangements.
NB these schemes have been introduced to meet a novel and unprecedented challenge. They are constantly being reviewed and refined and we are seeing them evolve over time. If you have been refused once then we suggest trying again as the acceptance criteria may have changed.
Forecast your cash requirements
We do this all the time as it provides a reliable insight into our cash needs. It has, however, never been more important to know how much cash a business needs on a daily, weekly and monthly basis than it is now.
This is because It helps you to stay in control as much as possible – you’ll know exactly where your money is going and when payments are due. Knowing when payments are due helps you manage payments, including talking to debtors (people who owe you money) and creditors (people you owe money to) in a constructive way, particularly if you want to delay payments to creditors or speed up debtor payments.
Chase up outstanding payments
It is vital to chase up outstanding invoices to make sure money keeps coming in. Larger companies are often in a better position to pay and will help. If you are still operating then immediate invoicing after work is completed means that payment due dates will also come around sooner in the next few weeks.
NB VAT is deferred so you will not have to pay this across to HMRC until after the period of deferment ends.
Cut costs
Eliminating unnecessary costs is an easy way of limiting outgoings. and the impact on your business. Use the Government schemes to help pay outgoings where possible. You can also use any downtime to look at longer term costs and make decisions regarding leases, hire purchase agreements, workforce etc.
NB excessive outgoings is the most common cause of business failure so the sooner you look at this, the more chance you give yourself of creating time and space to deal with fast moving events.
Consider alternative finance
You may be eligible for CBIL assistance, so take the time to check.
If not, then there are various funders in the market who are willing to provide varying types of alternative funding to suit your business. Typically alternative funders are far quicker than traditional lenders to make decisions and allow access to funds and they are usually more flexible and willing to tailor support to your particular needs.
Keep your books and records up to date
This is often the first area to go awry during a downturn, but in reality it’s the most important thing to keep up to date.
If you want to apply for any of the help highlighted above, the lenders will undoubtedly ask you for your up to date business information.
Books and records are also important in case things do go wrong – they are your contemporaneous explanation of the financial affairs of the business and the management decisions that you made. So we would therefore recommend always keeping your books and records up to date.
Seek professional help
Our team is here to help you, as are other professional advisors, such as accountants and insurers. If you are in any doubt about the sorts of help that is available to your business then please don’t hesitate to get in touch so that we can assist you and signpost where other help is available.
As a firm, we have spent the past few weeks working with financial advisors and accountants to advise business owners on the help that is available to them, bring together the help available and tailor it to our clients’ particular needs. Sometimes this has involved restructuring the business to make it healthier so that it can cope with the familiar challenges, or sometimes it has involved talking through the support packages on offer and simply assisting the business to ‘hibernate’ as possible so that outgoings and liabilities are kept to a minimum.
These are novel times and the team is working in partnership with businesses and other professional advisors to come up with novel ideas to address the unprecedented challenges at hand.