We all changed aspects of the way we ran our businesses during the first phase of the Coronavirus pandemic. Some changes were mandatory, others represented the ability of business owners to reinvent and respond to adversity.
With the blow of a second nationwide lockdown and Brexit approaching, it’s worth reflecting on the lessons learned considering all scenarios so that you continue to build resilience and adjust your strategy.
Our tips on the planning that should be top of your agenda are highlighted below.
Planning is still important
While plans may be changing more frequently than usual it is still important to work to shorter term plans (6-12 months) which should regularly be reviewed against your real-time data. Modelling as many scenarios as possible will show you where to adjust your planning as you go to make sure your business remains sustainable.
Keep accessing government support
• The furlough scheme has been extended for the duration of the lockdown to give a little more breathing room for businesses, however it is still important to plan what you will do once this scheme ends. It is likely to revert to the Job Support Scheme brought in just before lockdown, which could be useful to businesses who have shift workers or part-time roles.
• The VAT cut to 5% for hospitality businesses has been extended to 31st March 2021.
• Bounce Back Loan Scheme – Applications have been extended from the end of November to 31st January. Recent changes mean that this scheme can now be extended from six to ten years to make re-payments easier on your business. This extension could halve monthly payments and businesses are also able to make interest-only repayments or take a six-month payment holiday if required.
Explore all borrowing options
All loan schemes have been extended until 31st January to support businesses following the announcement of the second lockdown. Some business owners have had a real struggle accessing the Coronavirus Business Interruption Loan Scheme (CBILS) from their bank. However, alternative lenders have proved a viable option in these situations.
We’ve also found that many businesses applied for the Bounce Back Loan as these were easier to access, only to find that they didn’t go far enough in helping their business stay afloat. In some cases it has been possible to upgrade these to a CBILS through alternative lenders. It’s worth exploring your options here as a business interruption loan could be combined with refinancing of existing debt, with resulting lower interest rates. This could also enable a reduction in personal guarantee exposure that may be in place on existing debt.
During this lockdown keeping cash as readily available as possible is vital and asset finance could be a valuable tool for achieving this.
Building resilience has been at the forefront of business owners minds, many have been looking to streamline their processes and look at how the crisis has tested their existing operating model. As we approach even more uncertain times, effective planning will help to ensure your business remains sustainable.