Key actions to take and contingency plans to make

To support businesses and professional advisers, we have created a simple checklist of the key things that should be considered as we move into more stringent restrictions on how people live and work in the UK. These urgent actions apply to businesses of all shapes and sizes.

This is the guidance we are giving to those we are advising; most of whom are now working from home and wondering where to start. 

Last week’s announcement from the Chancellor set out a raft of measures to assist businesses which could make a vast difference to many. Some of the detail which will enable you to access these packages is still to follow. There are, however, actions that businesses can undertake to prepare for speedy applications and to prioritise what is most time-critical.

A checklist for businesses 

As you would expect, banks and HMRC are being very supportive of the businesses we are advising through these very challenging times. 

There are two key points that may influence the checklist below:

  1. A ‘business plan’ for recovery and repayment will put you on the front foot – you should be ready to talk through this plan with lenders and creditors.
  2. Be mindful of any director, personal or family member guarantees that already exist for loans. New guarantees may be required for any government-backed loan schemes.

You should be considering the following:

  • Coronavirus job retention scheme for those businesses that have concerns around staff.
  • Remote working/early holidays/short-time working/sick pay/statutory sick pay/travel policies/health and safety policies/redundancies.
  • Maintain an open dialogue with customers, suppliers, contractors and trading partners.
  • Time To Pay: Defer VAT/PAYE/NIC/CIS/MGD payments for pre-agreed periods.
  • Defer rates payments, where able to.
  • Where applicable, claim new business rates reliefs 
  • Maintain an open dialogue with landlords - agree Rent 
  • Prepare updated Bank Facilities including Capital Holidays
  • Coronavirus Business Interruption Loan Scheme (with effect from 23 March): These are loans, not grants. A business plan which details your ability to repay this will be essential.
  • Defer capital expenditure.
  • Apply for a reprieve on finance repayments in respect of hire purchases of leasing - three to six months or more if you can
  • Improve and accelerate Income
    • Credit control is of tantamount importance.
    • Reduce the amount of stock you carry.
  • Where applicable, claim new business rates reliefs.
  • Maintain an open dialogue with landlords - agree rent.
  • Prepare updated bank facilities, including capital holidays.
  • Review your insurance policies.
  • Review your contracts and advance orders.
  • Review your routes to market.
  • Review, and where possible, revise your terms and conditions.

There are many practical steps that businesses who are in a stronger position will be able to take; either themselves or with their professional advisers.

Businesses that have either been exhibiting signs of distress prior to the onset of the COVID-19 crisis will benefit from speaking to our advisers, who can assist in many areas, including:

  • Cash flow management and cash flow forecasting
  • Working capital solutions
  • Communications with key stakeholders
  • Business plans and the necessary forecasts to support loan applications.

We are also advising clients on the restructuring and insolvency options available to them.