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Business in the time of COVID19

As COVID19 continues to hit the news we take a minute to access the state of business across to UK as we ride out the storm. 

Paul Surtees Mar 11, 2020

Health authorities and governments across the world have staged an all-out assault on the ongoing global outbreak of coronavirus (or COVID-19 as this particular strain is called). There are some promising signs already: new coronavirus cases have plummeted in China and South Korea’s health minister said the country has “passed the peak” with the illness.

There remains, however, tonnes to do. Italy has now gone into full, nationwide lockdown and similar quarantine measures could be introduced in the UK if the outbreak worsens. The economic impact will likely be substantial.
 

Cashflow and corona - making your business virus-proof

 

Businesses need to brace for cash flow and liquidity problems due to halted production, supply issues and changing consumer behaviour. That, of course, is easier said than done. These are quite exceptional circumstances.

Orders are lower, people are late paying invoices, events are being cancelled, stock from abroad is at risk of not arriving. Many businesses are paying for supplies earlier than anticipated because of stockpiling and fears of deeper disruptions to transport linkages.

This disruption won’t last forever, though. In the meantime, finance teams and founders should keep a close eye on cash flow and, if needed, assess the different credit facilities available to manage the impact. A revolving credit facility could be a good option.

Corporate revolving credit facilities can provide liquidity for your day-to-day operations. These types of loan offer the flexibility of an overdraft but with no fees or commitments. You only take out the funds you need – if you need it – and pay what you need.

That sort of flexibility is priceless during uncertain times like these. With a smart approach to credit and the right lender, you can approach any quarantine scenario or economic slowdown with some security and confidence.
 

Life after COVID19 

 

In 2007, the former Wall Street trader and now writer Nassim Nicholas Taleb coined the term ‘Black Swan event’. These are events that are unexpected, unknowable and have societally transformative consequences.

By all appearances, the outbreak of COVID19 is one such event. For the people who lose their lives or a loved one, of course, the outbreak is disastrous. But for society at large, the impact doesn’t need to be overwhelmingly negative.

The British government has beefed up its regulations around sick pay and has promised to help business cope with change. We may also discover new ways of working. Working from home, for instance, could get a long-term boost through the short-term fear of contracting COVID19. Video-conferencing may come-of-age as business travel is curbed.

At some point, the panic around COVID19 will subside. Governments and health agencies will get to grips with the outbreak and life will return to normal. Businesses need to prepare to ride out the storm in the short term.

Luckily, there is so much choice for companies trying to plug any short term financial gap. In the long run, be open-minded: every crisis is a chance to learn. As a society and as individuals we might learn that coronavirus was the shock we would overcome. 

Keen to learn more about where the industry is heading relating to business finance, book in a time slot and one of the team will catch you up. 

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