Many businesses have been highly impacted by the Covid 19 crisis and will have taken advantage of the government support schemes, such as the coronavirus job retention scheme (CJRS) and government guaranteed loans.
However, these schemes will be withdrawn as the crisis eases. At this point, not only will HMRC and other creditor deferment be reversed but any borrowings, such as the Coronavirus Business Interruption Loan Scheme (CBILS) or Bounce Back loans, will eventually need to be repaid.
We understand that this is a very challenging time. The transition to the post Covid world is likely to be difficult and knowing the right direction and strategy is imperative. You will need to:
- Find the working capital to fund the restarting/growth of the business
- Deal with creditor overhang from the crisis period
These two are linked – it is essential both for your business and the wider economy that growth is not strangled by the overhang of Covid era problems. Proper analysis and planning can maximise the benefits for all stakeholders.
So how can we help?
We want your business to succeed and will work with you to try and achieve that, using our knowledge and experience to make sure that you get the best possible advice. Our experts have a wealth of experience in a wide range of sectors that include hospitality, manufacturing, food and agriculture, and charities to name a few. We really understand your business and the areas that you work in.
If you’re concerned about your business and its future, the earlier you seek advice the more options there are likely to be.
Our Covid Restart Review offers you:
|Assessment of the current financial situation|
|A business plan as the restrictions ease – we can either prepare a plan or review yours|
|A financial projection with sensitivities and a focus on cash needs|
|Setting out the options for your business – from fundraising (both loan and equity), restructuring options, the tax effects of reorganisations, to the consideration of directors’ duties and responsibilities, creditor negotiations and where necessary, insolvency processes|
|Recommendations and actions – an agreed plan based on the conclusions of the review|
It is likely that the issues you are facing will need both creative and commercial use of business planning and creditor management skills, including (where appropriate) the use of formal insolvency process to keep business going and maintain as much employment as possible.
That dreaded I word
We know that as a business owner, the word insolvency is not one that anyone wants to hear. However, the early involvement of an insolvency practitioner can actually reduce the chance of a failure of a business.
Whilst insolvency processes are a last resort, an understanding of insolvency outcomes is an essential reference point in seeking to negotiate with existing creditors including banks, landlords and asset financers. If the offer being made to them is better than the formal insolvency outcome they are more likely to accept it – especially if other creditors are accepting similar deals.
In times of crisis, you absolutely want PKF Francis Clark by your side. Their team of finance professionals responded immediately when we asked for help and guided us through one of the most challenging periods in the Charity’s long history. Our Trustees took great reassurance from the clear advice and solutions focused support that was given. We are now through the dark days and cannot thank PKF Francis Clark enough for all their help.
How we have helped other businesses
Multi site retail
- Company had expanded rapidly to 10 outlets and spent heavily on bringing the sites to a high standard
- Poor trading at four of the sites meant that they were not viable and led to cash crisis
- We helped prepare a restructured viable business plan based on continuing with the six profitable outlets
- The landlord liabilities arising from the ceased premises, along with the associated redundancy costs, were not manageable from cash flow so company proposed a Company Voluntary Arrangement (CVA)
- With support from the bank, the CVA proposal was approved on the basis that the company made contributions out of income over a 5 year period
- CVA satisfactorily completed with return of 37p/£ to creditors
Charity – transfer of business
- Charity providing employment related training services
- Underperformance on a large contract led to losses and financial pressure and a significant funding requirement
- Guarantee liability in respect of former premises also added to pressures.
- No asset base to provide security for funding
- Approaches made to charities with similar purposes with a view to strategic partnership.
- Partner found but only prepared to take on part of the activities
- Transfer of part of the operation negotiated and effected via pre packaged administration sale
- Group suffered downturn in business and was had significant creditor pressure, notably from HMRC
- Potential investor had been found but accounting uncertainties arose during due diligence so company sale not feasible
- Sale of business negotiated in accelerated timescale
- Business transferred immediately on appointment as administrators – pre packaged sale
- Business continued under new control and with fresh investment
- All employees transferred with the business so no jobs lost
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