Eleanor Temple, (pictured) chair of insolvency and restructuring trade body R3 in Yorkshire and a barrister at Kings Chambers in Leeds, responds to the measures announced yesterday (Tuesday March 17) by the Chancellor of the Exchequer, Rishi Sunak MP, to support businesses during the COVID-19 outbreak:
“The Chancellor’s ‘Whatever It Takes’ strategy is the right one, but businesses do need help now, and other types of help are needed alongside the additional access to finance announced today.
“Feedback from our membership is that otherwise healthy businesses are already experiencing a cash flow crisis. Many businesses will face insolvency without significant creditor forbearance or direct help from Government to bridge the gap in their finances. It’ll be expensive, but Government intervention is needed to weather the storm. As well as additional money going in to businesses, payment holidays for businesses on things like PAYE, NICs, or other taxes will help manage outgoings, too.
“The focus on loans could store up problems later: these loans will need to be paid back. Grants for small businesses will help, but larger businesses aren’t immune to the impact of COVID-19.
“The first step any business in difficulty should take is to seek professional advice. There are options out there. Speaking to creditors will also be key, and the earlier businesses do this, the earlier they may be able to rearrange payment terms.”