Updated: 2nd November 2020
A huge number of companies have endured unparalleled challenges during the Covid-19 pandemic which has pushed their business to breaking point. The scale of this business disruption means that the economic risks posed by Covid-19 are likely to remain long after the risks to our physical health have passed.
With trade and takings down during the government-enforced lockdown period, it is inevitable that the vast majority of businesses will have seen their cash flow take a huge hit, and unfortunately for many, these pressures will not simply go away once lockdown restrictions are eased.
It is likely that social distancing measures will remain in place for some time, a move that could affect the ongoing viability of many businesses, particularly those within the leisure and hospitality sector where large-scale social gatherings are an integral part of their service offering.
With restrictions on the number of customers a pub, bar, nightclub, or restaurant could accommodate at any one time, this could have a catastrophic effect on footfall as well as profits. Estimates have shown that ensuring a two-metre distance between patrons could reduce pub capacities by up to 70%. With fixed costs remaining, yet takings dropping to potentially just 30% of previous levels, there are fears many venues could be heading towards liquidation. While businesses will have no choice but to adapt to the new normal, for some this will simply not be possible.
If you are struggling to make ends meet during this time, your first step is to ensure you are taking advantage of all the government support schemes which are available to you and your company, from the Coronavirus Job Retention Scheme (CJRS) which can help with paying your employees, through to the Bounce Back Loan Scheme which can provide your company will the financial boost it needs when you are ready to resume trading. There are also a range of grants and tax deferral schemes which may provide you with the financial breathing space you need during these challenging times.
While the help offered by the government could provide some much-needed short-term relief, for many businesses this will not be enough to sustain them. If Covid-19 has led you to consider whether liquidation is the only viable next step for your company, it is vital you seek expert help and advice from a licensed insolvency practitioner who will be able to talk through your options whether you are wanting to throw everything you have at saving your company, or have made the decision to close your business down for good.
If coronavirus pressures have forced your business into financial distress, a licensed insolvency practitioner can explain all possible options from restructuring methods including administration, through to closure options such as company liquidation if the chance of recovery is slim.
Real Business Rescue have over 70 licensed insolvency practitioners across the country, providing help and advice to company directors who are facing company closure as a result of the coronavirus pandemic. Contact our expert advisers today to arrange a free and completely confidential discussion with your local Real Business Rescue insolvency practitioner.