There is continued news in the press regarding the up take or lack of up take from the banks and finance institutions that have been tasked with providing coronavirus business interruption loans.
If your business is currently in difficulties it could be that a business interruption loan is an appropriate solution to avoid Company Insolvency.
To qualify for the business interruption loan scheme, you must meet the following basic criteria:
- UK Based
- An annual turnover of up to £45 million
- That a lender would consider your business viable if it wasn’t for the Coronavirus pandemic
- That the business has been adversely impacted by the Coronavirus pandemic
- That the business was not classed as being a business in difficulty on 31 December 2019 if applying for funding of more than £30,000
To consider your options fully you should be considering the following:
- How has the Coronavirus pandemic affected your business?
- What steps you have taken to mitigate and safeguard your business considering the crisis?
- What do you think the short to medium term impact of the Coronavirus may have on your business and your sector and future viability? Have you furloughed staff, obtained any available grants, taken time to pay agreements with HM Revenue & Customs or other creditors?
- As always, consider your numbers, current management information, is it up to date? Projections? You will need a minimum of a 12-month cash flow projection. Historic accounts, what do they show?
- Are the numbers realistic and if so why? How can they be evidenced?
- What is going to be your funding gap? How much do you need to borrow, what are the other sources of funding you can possibly investigate?
- What is your appetite as a director / business owner moving forward?
- Your director’s duties – would a reasonable director take the action you are thinking about, although the government has suspended wrongful trading for the time being that doesn’t mean you do not have duties towards all stakeholders under the Companies Act.
- Take advice speak to trusted regulated professionals.
Should you or your clients require any free, confidential and regulated advice to navigate through the current crisis please do not hesitate to contact us via your usual point of contact or via 01270 212 700 or info@mgjl.wpenginepowered.com
Please remember the sooner advice is sought the more options there are available to avoid company insolvency, early action is the key.
All information is intended solely for informational purposes and should not be used as a substitute for specific professional advice.
