Whilst the causes and forces are different, this crisis reminds mind of 2008. Back then, as now, people were constantly advising me that those working in the corporate recovery and insolvency sector would be run off our feet. In reality this didn’t happen and the reason was a collective effort on the part of the government, the Bank of England and banks to try and support businesses.
This was combined with collective forbearance in the economy on the part of suppliers and landlords in deciding not to force companies under, but rather to work with them in order get back more than they might receive in a formal insolvency.
In the current crisis, the unprecedented support being offered by the government, the actions of the Bank of England in reducing base rates, assuming support from the banks and forbearance on the part of businesses (particularly landlords) could well see us through the current crisis without an unprecedented rise in company insolvencies.
As advice for company directors, we always advise they seek advice early. That advice will not necessarily be that directors should give up the fight. The obligation of directors is to ensure that they have the financial information to be able to properly assess the position and to talk to all stakeholders, including customers, suppliers, staff, landlords, the government and lenders. You will need to ensure that all parties are aware of your position and are reassured that you, as directors, are on top of the situation and together with the stakeholders can develop a plan to see your business through the crisis and, equally important, that you know what the business will look like when you come out the other side.
If you have concerns about the future of your business, please speak to Brian directly, or to your usual UHY adviser. We can spot the early warning signs and help to put parameters in place to ensure a continued future.