Impact of Covid on businesses in the UK – and how you can help yours survive.

According to the statistics released by the government for January to March 2022, the total number of registered company insolvencies is the highest level since second quarter of 2012.

This increase can be attributed to many factors on the economic climate, such as the COVID-19 pandemic, increase in inflation and changes in consumer behaviour which has a direct knock on effect on businesses.

At the start of the pandemic, there was a vast reduction in consumer spending as a result of lockdowns throughout the UK which meant that footfall fell as the public stayed at home. This lack of spending in local businesses meant many struggled to survive, forcing some of those to close during the pandemic. These factors ultimately resulted in a lack of cashflow to businesses when they were eventually able to reopen.

As a result of Government enforced safety measures to stop the spread of COVID 19, businesses had to invest at a time when they were already losing income to make further changes to deal with social distancing.

The Government, in an attempt to soften the impact of the financial disaster on the economy, introduced a few measures to try and keep businesses afloat. These included bounce back loans, (which were not always available to some businesses due to strict eligibility criteria) and temporary changes in legislation brought in 2020. While this might have been a lifeline for many businesses, not everyone was so lucky to survive, and some are facing difficult decisions on continuing to trade out of a very difficult situation.

How can I save my business from closing?

Firstly, the old saying “a problem told is a problem halved” is so true. It is important to seek professional advice as soon as possible if your business is struggling financially. Many Directors are forced now to face difficult dilemmas, having built up a previously successful business pre-Covid. They will face many sleepless nights worrying about the future of the business and their staff. 

There are several rescue routes in the tool kit that are available to give your company the lifeline your business needs to survive. A Company Voluntary Agreement (CVA), which would be administered by one of our licenced Insolvency Practitioners might be one of such routes available.

How we can help

Our expert team of licensed Insolvency Practitioners and staff can discuss the options available to your and we are here to support navigate you through this. To find out more please contact us here or if you prefer an initial chat, contact Sonya Stevenson on 07971 607 014 or e mail s.stevenson@frenchduncan.co.uk.

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