What help can I get for my business after the impact of COVID?

The UK government introduced several different schemes to help businesses over the course of coronavirus pandemic. With bounce back loans and the furlough scheme, designed to shield the major financial impact from businesses. However, the schemes have finished and after a long wait of around 18 months for many businesses, they have finally be allowed to trade at near full capacity. 

There’s no doubt that without the help of the government, more businesses would have gone under, but having gone such a long time without regular trading, lots of businesses are still at a critical point of financial distress. So without the continuing aid of the government, where are businesses left and what can they do if they’re struggling?

My business has debts – but it can work

When lockdown ended on ‘freedom day’ businesses were once able to begin trading at full capacity without any restrictions. Despite people returning to work, lots of businesses also returned with outstanding bills, overdue payments and statutory demands. These outstanding payments have left many in a predicament, struggle to continue to trade as debts mount up, despite having a good working business model, or shut up shop and close the company.

If you’ve run through all of the data, checked the figures and you know that your business has the potential to work, but is simply being weighed down by impending debts, a formal repayment plan, could help consolidate the businesses debts and give you a brighter future. A company voluntary arrangement is a formal repayment plan which is arranged with all of your creditors, it pools all of your outstanding debts into one affordable monthly amount. Crucially it also gives you protection from any creditor action, meaning they can’t issue CCJs or bailiffs. Typically, the process lasts for around two years, with any remaining debts written off.

Are there commercial finance options?

There are several different forms of commercial finance, and their viability will depend on what type of business you run and how it operates. A common problem for businesses which have just opened up, is having a lack of cashflow due to the knock-on effect of small businesses and suppliers not being able to pay each other. Waiting on unpaid invoices can massively impact how quickly cash flows in and out of a business. Invoice finance, which is a form of commercial finance, is one of the most commonly used for business struggling with cash flow problems. An invoice finance company will advance you up to 90% of an invoice, before collection the invoice, taking their fees and returning the change to you.

Another common form of commercial finance used to curb cash flow problems is asset finance. Effectively, it’s a means of taking cash out, using any expensive assets you have as protection for the lender.

To sum up

At the moment, things might seem a bit bleak, especially after the government aid finished. But as mentioned above, there are plenty of alternatives that are available to help you get on track.

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