The UK has been on lockdown since the 19th of March, and the government has launched a £330 billion loan scheme to help businesses survive during this time of uncertainty. However, there has been criticism for the scheme’s slow delivery, with reports of delays and confusion, such as the furlough calculator of HMRC is not fully operational.

There have already been significant job losses, people have been put on furlough and some companies have already gone into administration as a result of Covid-19 and its effects on the economy. It is estimated that some 18% of small and medium-sized businesses will be at risk of collapsing.

The next 12 to 18 months are going to be make or break for many businesses, especially SMEs. While the world waits for a vaccine and for normal life to return, for businesses, the best course of action is to try and mitigate the effects of the virus on their cash flow as much as possible.

Cash Flow

Your biggest problems are going to be a lack of cash flow during this time, and this is, unfortunately, the most challenging barrier you are going to need to overcome to survive. Start as soon as possible and put together an aggressive action plan to tackle cash flow issues. If possible, you should aim for at least 6 months’ worth of cash as it is likely you will need this much. Even if the situation improves much sooner than this, the impact left in its wake will likely persist for much longer.

Working From Home

If possible, your employees should be working from home to help cull the spread of the virus. This will involve remote working and online communication channels such as video conference and virtual meeting software. Your technology needs to be able to cope with the increased number of users, and security protocols need to be adhered to ensure no data leakages. During this time, there is no such thing as over-communication. Update your staff, check-in with them and keep an open dialogue going, so everyone is on the same page.

Apply for Aid

Despite the concerns and criticism of the schemes the government has implemented to rescue businesses, you should still apply for any help that you are eligible for. It was launched in April to help and will support SMEs with access to finance of up to £5 million.

It is called The Coronavirus Business Interruption Loan Scheme (CBILS). Your business will be eligible provided you are based in the UK, have an annual turnover of up to £45 million, and your business being viable if not for the current coronavirus pandemic.

The loans are given out by accredited lenders such as banks and asset-based lenders, who can provide up to £5 million for your business in the forms of term loans, overdrafts, invoice finance and asset finance. While you are liable for the debt, the government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied charges.

Business Survival

While you wait for the funds to come in from the government’s scheme, or if you are not eligible and need to look at other options, your next step is to implement a plan of action for business survival. This may involve some difficult decisions and cost-cutting measures, consider the following to help lessen the burden on your cash flow during this time:

  • Review forecasts – take a close look at how the loss of sales will impact your ability to pay suppliers and pay off debts. You will likely need to adjust your cash flow forecasts during this time.
  • Consider your business model – you may have to make significant changes during this time to try and continue to operate, such as home delivery or offering services online that you previously hadn’t provided. You may also need to downsize or halt certain activities such as travel.
  • Review your supply chain – the supply of products will likely be disrupted. So, you may need to scale back your production or your stock during this time. You may even need to consider finding different suppliers if your current suppliers are from countries that have been heavily impacted by coronavirus.
  • Communicate with your staff – during this time of uncertainty, it’s essential to be completely transparent with your team, who are likely quite concerned about their jobs. You should consider, if possible, putting some of your workers on furlough and claiming back up to 80% to a maximum of £2,500 pcm of their wages through the government’s Coronavirus Job Retention Scheme to lessen the burden of paying full payments to all your employees without having to make anyone redundant.
  • Re-negotiate – during this time we are all in the same boat, and so you may have reasonable ground to re-negotiate payments with your suppliers or debtors. They may not agree, but it’s worth trying this route to help keep your cash flow healthy.


If you are able, you could consider shifting your business to be a part of the coronavirus solution. For example, some alcoholic beverage companies have begun producing hand sanitiser to help with the shortage, whereas some tech companies are looking into making ventilators and respirators for the NHS.

Despite the enormous economic impact the virus is having, there are some opportunities that you could take advantage of if you work quickly. People are staying at home and spending a lot more time online. As well as home delivery for products, could you offer some kind of online learning classes or consulting? Do you have something that can aid at home working? Look for the opportunities that this situation can bring so you can continue raising funds as well as merely trying to survive.

During this time of uncertainty, you will need to work quickly to review all of your options and implement changes to help your business survive. Speak to your accountant about the opportunities and business survival tactics they think you need to be doing now to help your business through this tumultuous time.

Hasib Howlader, owner of Howlader & Co., is a licensed insolvency practitioner, chartered accountant and chartered tax adviser (a rare breed!). He has a wealth of experience in all financial matters, having cut his teeth at both UBS and PricewaterhouseCoopers before moving to direct his own Chartered Accountancy practice where he has overseen exceptional business development.

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