Covid Cashflow Impact – When will it end?

It is clear that the government have identified the importance of regional or business sector lockdowns and have, in their latest announcement, granted additional support to business forced to temporarily shut by:

o  Subsidising 66% (to a maximum sum of £2,100 pm per employee) of their employees’ wages from 1 November 2020. This subsidy will be reviewed again in January 2021.

o  Making available further businesses grants of up to £3,000 a month, paid fortnightly

Economic experts have suggested that this ‘should cushion to blow’ and be ‘welcomed by thousands of small businesses’. However, through October and those that are impacted, but not forced to temporarily shut, will from November only receive a subsidy which in affect is around 20% of the wages costs. We are certainly all facing a tough and uncertain winter with or without the governments help.

Those of you who have soldiered on throughout and not taken any first furlough assistance and now, because of the lack of improvement through the summer, find themselves with tight cashflows and are wish they did, will be feeling the pinch.

If you took your B/CBILS early, it is possible that you did so with a view to being back in work or normality by the late Summer and now your cashflow maybe under pressure. Whilst it is helpful that enforcement and CCJ have been stalled it can also work against you where you are not able to enforce to get paid and it is simply become a long term problem. Bankers and funders certainly need to be reviewing when does a debt become a bad debt they won’t fund.

The government measures put in place are to stop our economy completely collapsing all at once and therein the government itself becoming bankrupt as the collectable taxes becomes less.

The risk now firmly sits on the director’s laps…how long is the right length of time to wait to see what happens? When will my market return? The exemptions from wrongful trading are now at an end, exposing directors to measure risks in a market that no one has ever experienced before.

Insolvency & Turnaround experts look at your financial position, balance sheet and cashflow from a different perspective from other professional advisors, such as your accountant and will quickly be able to establish and establish the justification for continued trading, waiting or seeking additional funding. Sometimes you just need a fresh perspective.

Tap into our expertise at Harveys’ and let us help keep your business stay on its feet during these unprecedented times.