24th February 2021
Leonard Curtis Bristol Director Andy Beckingham on recovery options for SMEs during and after the Covid-19 crisis
“With nearly two-thirds of entrepreneurs feeling their business might not survive the pressures of the pandemic , three simple pieces of advice will help navigate these testing times.
“Firstly, forecast. Secondly, regularly review and challenge your forecast to work out how you can bridge any gaps in your cash-flow. Thirdly – and crucially – take action now. The quicker you act, the more options are available.
“A Company Voluntary Arrangement (CVA) proposal may be suitable for many more businesses than just high street brands and large multiple retailer chains. As well as engaging creditors up-front, a CVA offers flexibility to be tailored towards very particular circumstances such as lockdown. It’s a helpful recovery option to bide time until business picks up and can also offer some debt forgiveness.
“Pre-pack administrations can be the right option for some circumstances, but they are now subject to increased external scrutiny – particularly where business sales to connected parties are involved. Make sure you take advice from a reputable and licensed insolvency practitioner who can help you steer the correct path. Those who get it wrong could face ongoing challenges from the taxman.”
If you have any questions, get in touch with Andy on 0117 929 4900.