This winter and into 2021, businesses will need to get leaner and fitter to overcome the challenges and grasp the opportunities on the horizon.
What are the challenges that businesses have faced during COVID-19?
Businesses faced a perfect storm as the first wave of support for the economy was due to end this autumn. Then in mid-September the Chancellor gave us a partial, and temporary, reprieve. Furlough, due to disappear on 31 October, has been replaced by the Job Support Scheme. SEISS has been extended to April next year. The prohibition on landlord forfeiture has been extended, as has the prohibition on covid-related winding up petitions. Loan scheme deadlines have been extended but not by long. Repayment of CBILS loans has been extended up to 10 years. Deferred VAT is now repayable over a longer period.
At the same time an entirely new restructuring regime has been introduced offering opportunities that are still to be explored. Less helpfully a little noticed change to HMRC preference will affect the banks’ capacity to lend. The outlook remains uncertain: will we see the double whammy of a second lockdown and a no-deal Brexit; or will the economy continue a path of gradual and uneven healing?
The Chancellor’s reprieve has given a window of opportunity for businesses to ensure they are prepared for next spring.