Updated: 24th June 2020
The social distancing measures introduced by the government to combat the spread of coronavirus have left many business owners simply unable to comply and therefore unable to open their doors. If you’re in this position you may be able to adapt to meet the new requirements, however, with just a few changes.
Initially, it’s important to consider how the physical and practical elements of your business can be adjusted to allow you to trade through these uncertain times intact. Limiting the number of visitors entering your premises, for example, and laying out markers two metres apart – reduced to one metre from Tuesday 4th July - which helps customers know where they should stand or wait, whilst also giving them confidence that you’re taking the possibility of spreading the virus seriously.
But apart from adapting in this way, how else can you offer your business the best chance of survival?
If you run a small or rural business, or one that operates in the retail, hospitality, and leisure sector, you may be able to secure grant funding via your local authority in England. Non-repayable grants of up to £25,000 have been made available by the government to support those hardest hit by the virus.
Government loan schemes
The Bounce Back Loan Scheme (BBLS) and the Coronavirus Business Interruption Loan Scheme (CBILS) both help small and medium sized businesses that have experienced disruption due to the coronavirus outbreak.
Help for employers
If you employ staff in your business, the Coronavirus Job Retention Scheme could help you retain your employees and preserve jobs. The scheme is set to run until the end of October and pays 80% of each employee’s wages up to a maximum of £2,500 per employee per month. Your costs of employment are also covered under this scheme.
If you’re unable to adapt to social distancing requirements there are various insolvency arrangements that could still save the business, or if liquidation is the only option, close it down in an orderly manner.
Business rescue procedures
Viable businesses experiencing temporary financial problems may be eligible to enter a Company Voluntary Arrangement, or CVA. This involves a licensed insolvency practitioner (IP) renegotiating repayment terms with your creditors, and putting in place a new affordable arrangement that supports your business as you continue trading.
Company administration may also be an option depending on your circumstances, and offers an eight-week period where creditors cannot take legal action. This allows the administrator to devise a plan for rescue where possible.
If liquidation is your only remaining option a Creditors’ Voluntary Liquidation (CVL) ensures the company closes down according to statutory regulations, with no potential for creditors to reinstate it at a later date.
A further important consideration when liquidating a business is the investigation that takes place into director conduct by the office-holder. If you’ve voluntarily placed your company into liquidation rather than waiting for a creditor to enforce it, it’s viewed in a more favourable light as you’re placing your creditor interests first.
Under this procedure you may also be eligible for statutory redundancy payments as a director, which would help to pay for the process itself or provide you with funds to support your personal finances.
Real Business Rescue is the UK’s foremost business rescue and recovery firm, and we always place our focus on recovery rather than closure. For reliable independent advice on dealing with the social distancing rules in your business, please contact one of our partner-led team for a free consultation.
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