What do Businesses Need as the Covid 19 Lockdown Eases?

Our Specialist Turnaround, Restructuring and Insolvency Practitioners Look at the Challenges Businesses Will Face Coming Out of Lockdown

As we reported back on 20th March, just before the lockdown began, many thousands of businesses had already run into severe difficulties almost overnight, and they weren’t just the so-called Zombie businesses that just about survived the credit crunch recession of 2008/09, but businesses that were thriving with full order books and trading profitably.

Unprecedented levels of Government support and intervention has, so far, prevented mass unemployment and huge numbers of insolvencies, but as the lockdown is slowly eased, and economic life slowly restarts, we know that this Government support will also be steadily cut back. So now is the time for businesses to plan for life in the post lockdown world. Some businesses will, sadly, not survive. Others, through restructuring and taking the right decisions will survive. Whatever the case, speed is now of the essence, and our insolvency practitioners can help.

As Ian Girling, Chief Executive of the Dorset Chamber of Commerce has said recently:

“It is not so much about the future as the next couple of months for many businesses as they come out of lockdown and begin trading again.”

In this article first we look at what support the Government has given – and ask has it just ‘kicked the can of debt down the road’ as the saying goes? We then look briefly at some key things that businesses want from Government as lockdown is eased. Finally, as specialist turnaround, restructuring and insolvency practitioners, we know how hard the next few months, even years, will be for many businesses. We are here to help.

Business Support from the Government

Unprecedented levels of Government support for businesses have included:

There is no doubt that this package of support has ensured that the economy did not collapse and has bought time for many businesses to prepare for the easing of lockdown and the return to commerce. There have been many complaints about how difficult it was to take advantage of some of these measures, especially the Coronavirus Business Interruption Loan Scheme, for example. But on a macro level the raft of packages has helped enormously.

Certainly, great swathes of insolvencies have not started yet, although large numbers, it seems, are inevitable, sadly, over time, and in some sectors more than others. Likewise, huge levels of redundancies have been avoided, so far, but emerging statistics are showing that unemployment will spike at levels not seen since the 1970s. It is, however, key how businesses react and respond to the easing of Government support, and the next two or three months from early June are crucial.

Our advice from 20th March was as follows, and still remains true today:

“Most importantly, although for many it will be very hard not to, please DO NOT PANIC. New initiatives are being released by the Government on a daily basis, all of which are designed to ease the burden.”

 The decisions that businesses make now are the key to whether they will survive and avoid the can of debt striking further down the road.

What is the British Chambers of Commerce Advising?

Aside from all the deep worry and concerns that the Virus has presented to health and the tragedy of so many deaths, it is clear (and obvious) that the country needs to get working again as fast and as safely as possible.

From a business perspective, the British Chambers of Commerce (BCC) in its business tracker polls has found that “Firms are ready to embrace the new normal, but that the Government’s support must adapt.”

Looking first at the readiness of business to restart, the BCC’s tracker study showed that:

Ultimately, it is up to each business to work its way through what is required to allow a safe return to work, based on Government advice and guidelines, but the above figures are encouraging and show that many businesses can and will adapt.

On three key areas, the BCC’s Director General, Dr Adam Marshall had this to say about what more businesses needed from the Government:

Moving from the macro position, to the support individual businesses will need on a local basis, Ian Girling of the Dorset Chamber points out that:

“Dorset Chamber will continue to work closely with our members and the wider business community, local councils  and the Dorset Local Enterprise Partnership to provide the business support that is needed to aid recovery. The strategy will come from consultations with key stakeholders and local business with particular emphasis on individual sector needs.”

Where do our Specialist Restructuring, Turnaround and Insolvency Practitioners Come In?

It is clear that the survival and recovery of businesses as the lockdown eases will require input and help from a number of sources, from the national Government to key support available locally.

Our team is also there to help you make the decisions you need, especially if restructuring is needed. Amongst other things, we can help you with:

We are here to help you understand your options, take the emotion and stress away as much as possible and act to ensure that any decision is as pain free as possible.

Call our insolvency practitioners on 01202 551193 or contact us for a Free initial consultation.

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