25 March 2020
- Government guidance for businesses who trade internationally
- The Government has confirmed that a £500 million Hardship Fund will be available to those most affected by coronavirus – check with your local council as they are deciding how to allocate the new funding.
- An update from the Government for businesses who can remain open as home working is not an option.
20 March 2020
- More information was published on the Coronavirus Job Retention Scheme and what that means for employers and employees.
- See our Useful Links page for a list of bank websites if your employees need to consider mortgage or loan repayment holidays.
- Business Rates – Businesses who qualify for the small business grant from the local authorities should have this paid into their banks automatically. Some local authorities have a form on their website that needs filling out so they have the businesses account details. Please visit their websites and complete the form to speed up your receipt of the grant.
19 March 2020
- Access to the British Business Bank’s Coronavirus Business Interruption Loan Scheme. Additional information on the scheme:
- Companies with less than £41m turnover
- Sector eligibility as for the EFG with only a few exceptions
- Amount: £1,000 to £5,000,000 (as increased yesterday)
- Term: 3 Months – 10 Years
- Interest free for first 6 months
- No fees
- A package of information may be required as part of the application which could include the latest annual accounts, current management accounts and forecasts.
- These are to be made available through the high street banks – View the High Street Banks Offering Support
- Bank of England Lending Facility – Large businesses impacted by the Coronavirus outbreak will be able to access a new lending facility, which will be run and funded by the Bank of England. The Covid Corporate Financing Facility will provide short term bridging finance to businesses by purchasing a type of debt called commercial paper. The BoE has stated that the aim is to support liquidity and ensure businesses can pay rent, staff, suppliers and purchase stock, however we are awaiting details of eligibility criteria The scheme is expected to be running by the start of next week.
- Last week, the Bank announced a 0.5% cut in rates to 0.25% and a package of measures to help businesses and individuals cope with the economic damage caused by the virus. Now The Bank of England has cut interest rates for the second time in a week, as it attempts to support the UK economy during the covid-19 pandemic. Interest rates dropped from 0.25% to 0.1% – their lowest ever in the Bank’s 325-year history.
17 March 2020
- Debt collection. Focus on recovering larger outstanding debtor balances and in particular, seeking payment of monies due from larger companies who may have the flexibility to accommodate requests for early payment. Where debts are proving difficult to collect, familiarise yourselves with the debt recovery process and you should not feel inhibited about issuing proceedings against perhaps a major customer.
- Reduce non-essential business spending.
- Ease cash flow pressure by using invoice finance which is where cash can be borrowed against sales invoices raised. This will not be suitable for all businesses and customers will need to be corporate entities rather than individuals. Invoice finance can be a method of providing simple and immediate additional finance that works with the cashflow of your business.
- Asset finance. Whether it be through an existing or new lender, consider if there is the ability to raise finance on unencumbered or existing part financed assets including property, stock and machinery.
- Approach your existing bank. Banks are offering holidays on loan repayments and are encouraging customers to get in touch to discuss option
- Support for tenants and homeowners: Individuals who are in difficulty due to Coronavirus will receive a three-month delay to mortgage repayments. The Government has also announced a radical package of measures to protect renters and landlords affected by coronavirus, see https://www.gov.uk/government/news/complete-ban-on-evictions-and-additional-protection-for-renters
- Third party investment. Some sectors remain very popular with investors and this is a way to secure additional finance. We can put you in contact with a firm of advisers if you want to explore this.
- Consider emergency funding from alternative finance providers. This usually has high interest rates, short repayment terms and the need for personal guarantees. Be cautious, but if you use a reputable Commercial Finance Broker this could be an option
- Rent. Landlords will be expecting a call from their tenants to request a rent holiday or change in payment terms. This could ease cashflow and should be considered
- Focus on cost cutting measures, including elimination of non-essential overheads, reduce staff costs, amend supplier payment terms, reduced opening hours, etc.
- Companies House – consider making contact now if your accounts might be later for filing, see https://www.gov.uk/government/news/coronavirus-if-your-company-cannot-file-accounts-with-companies-house-on-time
- Charities have also been advised by the regulator that they can request additional time to submit their annual returns, see https://www.gov.uk/government/news/filing-charity-annual-returns-during-the-coronavirus-pandemic
- Additional advice for businesses on paying Statutory Sick Pay, Business Rates, the Business Interruption Loan Scheme and support for paying tax.
You should of course see what is covered on your business interruption insurance, but in most cases there might not be cover for this type of business interruption.
Whilst the last financial crisis in 2008 was about balance sheets, this is about access to cash. So we hope the above measures can help to make sure that you have enough cash. Do not rush into making decisions without having first sought professional advice and having carefully thought through the possible impact of such changes on the business and your own personal position.
Those of us who have battled through previous downturns will know business is cyclical and this too will pass.
As is normal, please do make contact with your normal HWB adviser, we are here to support you.
This page has been prepared for information purposes only. It is not intended as advice and no responsibility can be accepted by Hopper Williams & Bell Limited and its associated companies for any loss resulting from acting or refraining from acting as a result of any material in it.
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