A managing partner at accountancy firm Anderson Anderson and Brown (AAB) has urged more businesses to apply for the government Covid-19 loan schemes with the aim of positioning themselves strongly for the “next normal”.
Lyn Calder, who is also the firm’s head of deals for the central belt, said business owners must plan for their longer-term future, and consider how they will plug the funding gap post lockdown and “demand for their products and services begins to ramp up again”.
Calder also commented on a recent study carried out by the British Chambers of Commerce (BCC), which reported that uptake of the treasury’s unprecedented financial support packages via the Coronavirus Business Interruption Loan Scheme (CBILS) and the micro-loans scheme has been relatively low – with 57% of those surveyed not intending to apply for any financial support.
She said: “There are a variety of reasons for businesses not taking up these support measures, from worry about taking on debt during this period of economic challenge, to a perception that these loans only apply to those urgently needing cash to see them through the crisis. Others are thinking that if they can get through the lockdown they’ll be ok, but the restart needs to be funded too.
“My colleagues and I at AAB are concerned that many businesses have not considered how they will pay staff salaries and cover raw material costs once trade starts to pick up again.
Given that the furlough scheme will not last indefinitely, and that businesses won’t have the luxury of funding products built from their debtor book.”
She added: “I would advise business owners to consider applying for one of the Covid-19 debt schemes as part of their contingency planning for when they re-start their operations. It would be a prudent step to future-proof any business at the moment.”
The news comes as a revaluation of business rates will no longer take place in 2021 in line with the government’s latest efforts to “reduce uncertainty” for firms affected by the ongoing pandemic.
Communities Secretary Rt Hon Robert Jenrick MP confirmed that legislation has now been introduced to bring the next revaluation forward by one year from 2022 to 2021.
The announcement comes as ministers want to ensure businesses have “more certainty during this difficult time”.