Cowgills client Q&A summary – 21 April
On the 21 April we held a Q&A session for clients of Manufacturers Alliance through Zoom. Guests were able to hear from a panel of experts at Cowgills.
We have provided a summary of some of the key topics that were discussed. We will be holding future events for clients and contacts, do drop us a line if you would be interested in attending firstname.lastname@example.org
Summary of today’s call
Business Interruption Loan
The last couple of weeks has shown that the Business Interruption Loan Scheme is evolving.
A lot more businesses having their applications processed, with NatWest being one of the more supportive banks during this process.
We have seen the Government have put more pressure on banks to get funds out to businesses quicker than they have been doing. We believe banks are in the process of dealing with c.200,000 applications.
In the last week or so we have seen a number of changes.
- Businesses can now apply direct to the bank.
- A full list of accredited finance providers can be found here. Alternative lenders have been approved.
What we are seeing is that some lenders are looking after their current clients first so the application process may take some extra time to be processed.
Some banks are no longer asking for personal guarantees whilst others are on looking at this on an individual basis.
All banks are different. For more advice we would recommend you contact your bank. The process isn’t a one size fits all.
What is clear is that you have to have the preparations done before applying for the Business Interruption Loan.
- Cashflow forecasting model – you will receive better terms from the bank if you have a cashflow forecast.
- A bank will want you to prove viability pre and post coronavirus and the steps you’ve made in the interim. The Cowgills team have built a model template and we can roll this out quickly to clients. It is simplified so you have to a tool use and update yourself.
- Basic set of forecasts, the historical viability of the business to show how the businesses financial performance will track during Coronavirus, including the steps taken will be critical for the bank.
- Relatively simple business plan will also need to be put together which we have a template for and are more than happy to sit down with you to discuss this.
Having prepared the documentation before approaching a lender, we are seeing a number of our clients creating a shortcut in the process, in particular with Lloyds, Barclays, Santander and NatWest.
Banks are looking for the evidence that your business has the potential to come out the other side.
Wrongful Trading and the insolvency regime
Changes to the insolvency regime have been backdated to 1 March.
For the next three months, wrongful trading provisions have been relaxed.
Relations to these provisions does not change the duties of the directors who must be mindful of these when continuing to trade especially in the event that the company subsequently fails in a relevant period.
There will be checks and balances so it should not be seen as a free pass for directors to just make poor financial decisions.
Wrongful Trading gives comfort that you can make decisions as a director, however, please be careful, document them all, pay only what you can justify.
The information was correct at time of publishing but may now be out of date.