- 11 Mar
Emergency Finance Help With The Business Impact Of Coronavirus
There have been many impacts from novel coronavirus and the hysteria that has surrounded it. In some cases companies have been receiving huge orders to assist with the UK Government's preparations. What might be termed "coronavirus finance" can be essential to help deal with this.
Surges in Demand
Also there have been surges in demand for products that people are stockpiling in preparation for any period of quarantine, or compulsory lock down. These have included hand sanitiser gels, facemasks and basic supplies such as pasta and toilet rolls (which some supermarkets are now rationing - despite assurances that the situation will correct itself with new deliveries in the near future).
Negative Impact Of Coronavirus On Businesses
In other cases the impact may have been more negative on businesses. Already we have seen the first casualties e.g. the airline Flybe going into Administration, with the outbreak being cited as the final straw. There are likely to be more insolvencies to follow, despite Government measures regarding insolvency that are likely to postpone some failures.
Now might be a good time to consider implementing bad debt protection against debtor insolvency, to protect and cushion your company.
If you are worried about insolvency, and the implications of continuing to trade whilst insolvent, please speak to Andy Pear at BM Advisory who can assist you.
With the whole of Italy already in a lock down "self isolation" protocol, people are speculating on how long it could be before similar measures are invokes in the UK. Let's hope that does not become necessary, as the impact on purchasing will be significant as people stop travelling and stay at home.
The impact on your workforce may also become an issue, as more and more people are following the emergency "self isolation" protocols. Many businesses are heavily reliant upon staff in order to continue production and delivery of products and services.
As the fear continues to grow, in response to the rising number of cases, it is likely that there will be further impacts on demand in the UK. I have heard of businesses shutting down their premises and sending everyone to "work from home", and parents cancelling childrens trips. The impact on our economy could be significant and that will bring problems for many businesses.
Financial Impact From Coronavirus
Many companies operate on a hand to mouth basis, and do not have the reserves to withstand this type of disruption, even on a short term basis. The Government has promised some support e.g. Time To Pay arrangements (still on a case by case assessment basis though), and the possibility of "hardship finance" at favourable rates. It remains to be seen how quickly, and liberally, this will be implemented. Today we have also seen base rate cut from 0.75% to just 0.25% as an emergency measure to support UK businesses.
UPDATE 20/02/20 - Following another cut in base rate to 0.1%, the Government has announced the Coronavirus Business Interruption Loan Scheme (CBILS).
Emergency Financial Help
I received an email from one of our panel of funders today, advising that they will be withdrawing business loans to several of the hardest hit sectors of the UK economy, not great news for those affected. I question how long it will be before we see others following suit?
At present there is still business funding available from our panel of funders, and so now is a good time to apply for emergency business finance in order to prepare your organisation for any further impact from the novel coronavirus outbreak.
See our article: Will UK Companies Run Out Of Cash This Month?
Related content: Business Rescue Finance.