Covid-19 business news update 28 April 2020.
28 April 2020.
James Salmon, Operations Director.
During the Covid-19 outbreak we will continue to share (as we can) the business news stories we have seen that we think will affect our members and readers. The news stories you might have missed that might have an impact on SMEs and those that sell on credit.
Prime Minister Boris Johnson said yesterday that the United Kingdom is at the moment of maximum risk in the coronavirus outbreak, as he urged people not to lose patience with the country’s current lockdown restrictions. Speaking outside No 10 for the first time since recovering from the virus, Mr Johnson said “we are now beginning to turn the tide” on the disease.
Yesterday, stock markets started the week higher as investors reacted to the lifting of Covid-19 restrictions around the world. However, Primeminister Boris Johnson warned the FTSE 100 gained 1.64% on the day, whilst mid-cap stocks listed on the 250 added 1.69%.
Oil prices collapsed again yesterday, with America’s benchmark, West Texas International, falling by 28%. The drop was triggered by the United States Oil Fund, the world’s biggest oil-backed exchange traded fund, announcing that it would sell its short-term contracts. A week ago American oil prices entered negative territory for the first time, before rebounding slightly
The UK’s small businesses will have guaranteed access to loans of up to £50,000 within 24 hours of applying, chancellor Rishi Sunak announced yesterday. The new loans will be 100 per cent guaranteed by the Treasury, meaning the government will take on all the default risk, and will be available from next Monday at 9am (see belowfor more) .
Michael Gove said that agreeing a post-Brexit free-trade deal between the EU and UK is “entirely possible” before 31 December 2020. Michael Gove said that the firm deadline would “concentrate minds” and would not be changed, despite the covid-19 crisis.
Chinese scientists say the covid-19 will not be eradicated, adding to a growing agreement around the world that the pathogen looks set to return in waves like the flu.
“This is very likely to be an epidemic that co-exists with humans for a long time, becomes seasonal and is sustained within human bodies,” said Jin Qi, director of the Institute of Pathogen Biology at China’s top medial research institute, the Chinese Academy of Medical Sciences.
More than 3 million people have been confirmed as infected and over 210,000 killed in the global Covid-19 pandemic.
“The virus is heat sensitive, but that’s when it’s exposed to 56 degrees Celsius for 30 minutes and the weather is never going to get that hot,” said Wang Guiqiang, head of the infectious diseases department of Peking University First Hospital. “So globally, even during the summer, the chance of cases going down significantly is small.”
Rishi Sunak launches bounce back loan scheme for small firms
The Chancellor has launched a new loan scheme for Britain’s smallest firms following intense lobbying over fears millions of businesses would never recover from the covid-19 lockdown.
The new “Business Bounce Back” loans will be 100% guaranteed by the taxpayer and will provide firms with up to 25% of their turnover up to £50,000 with no interest payable in the first year.
Rishi Sunak has come under fire for the Coronavirus Business Interruption Loan Scheme (CBILS) designed for SMEs after businesses complained that lenders were complicating credit decisions.
Under CBILS, firms with turnover of up to £50m are allowed to apply for loans of up to £5m with 80% of the debt backed by the government.
Small firms applying under the new scheme need to fill out just a “simple, quick, standard form”, Mr Sunak said, while banks will not need to perform any “forward looking tests of businesses viability”.
Yesterday, the Bank of England said banks should rely “on judgement in the absence of financial forecast information” when making credit decisions. Banking body UK Finance responded by saying that lenders “will only ask businesses [applying for CBILS-backed lending] for information and data they might reasonably be able to provide at speed.”
Business leaders eye cautious return to work but fear second wave
As Boris Johnson assures the country that discussions will this week take place about how the country can get back to work, the Business Secretary Alok Sharma has been working with businesses and unions on guidance covering outdoor, leisure, offices, non-food retail, factory and warehousing.
The work will feed into central plans for lifting the lockdown. Some business leaders are calling for greater clarity, such as Adam Marshall, director-general of the British Chambers of Commerce, who said information about the timeline was needed to help businesses prepare.
Elsewhere, Kate Nicholls, chief executive of UK Hospitality, said: “With social-distancing measures still in place, reopening the hospitality sector without a plan would be catastrophic.”
Ryanair boss Michael O’Leary also warned against risking a second lockdown, arguing that plans to have airlines running partial services were “idiotic”.
HMRC moves to combat double counting furloughed workers
The accuracy of data on furloughed workers has been questioned after HMRC said it would end daily reporting and move to a weekly update on the numbers.
The move aims to avoid double counting those workers who have more than one job and so could show up several times.
Figures suggest that more than 4m people are now relying on the scheme, which covers 80% of employees’ wages up to £2,500 a month.
Tej Parikh, chief economist at the Institute of Directors, commented: “While double-counting may be affecting the overall number of individuals affected, it’s still valuable to be able to put a figure on how many jobs are being protected by the scheme.
Gauging which sectors are engaging most with the system can help our understanding of the current impact on the economy.”
Meanwhile, the Chancellor Rishi Sunak is discussing with business groups and unions how to phase out the job retention scheme to avoid a surge in unemployment when it ends.
Furloughed employees urged to utilise new skills toolkit
Gavin Williamson, the Education Secretary, is today launching a toolkit offering furloughed workers free lessons in video calling and everyday maths.
“The Skills Toolkit” will also include online lessons on how to code and use social media and have been developed by Leeds University, The Open University and the Institute for Coding.
Mr Williamson urges businesses to encourage their furloughed employees to use The Skills Toolkit to “improve their knowledge, build their confidence and support their mental health”.
Tax avoidance – should we punish past misdemeanours in the middle of a pandemic?
Following a call from leading clergyman for companies based in tax havens to be denied government help during the coronavirus pandemic, Labour MP Peter Kyle pressed the Chancellor to push such companies to adjust their behaviour once the crisis is over.
In response, Rishi Sunak said simply that it was important that businesses “act responsibility”, but did not set out any plans to bar tax-avoiding firms from state bailouts.
Elsewhere, Margaret Hodge, another Labour MP and former head of parliament’s public accounts committee, says multinationals that avoid paying tax in the UK should be made to repay their loans before paying dividends.
Singling out Starbucks, Virgin Active, Arcadia and The Range, Dame Margaret suggests in a piece for the Times that the government require companies to demonstrate they make a “fair contribution to the public coffers by paying their tax” before they can benefit from state aid. “The law-abiding taxpayer will settle for nothing less.”
Finally, the Telegraph’s Matthew Lynn asserts that such arguments are moot considering if the companies are not helped they will be paying no further taxes anyway. Lending to them regardless of their past behaviour now means the government can influence how they are run in the future.
In the middle of the worst recession in history, “we need to make sure that each bailout remains a purely economic decision. Everything else can wait for later.”
English councils plead for £10bn to cope with coronavirus
The Chartered Institute of Public Finance and Accountancy has said at least £10bn will be needed to help English local authorities survive the coronavirus pandemic – just £3.2bn has been offered so far.
Car finance protection ‘could lead to financial difficulty later on’
Experts at AA Cars have said newly-introduced car finance protection will ensure drivers are “greatly reassured”.
New guidelines by the Financial Conduct Authority allow for car finance policies to be frozen for up to three months. Duff & Phelps spokesperson Mike Turner urged firms to be cautious when granting payment freezes, warning that some customers could find themselves in “greater financial difficulty” at a later date.
DON’T LET COVID-19 BUST YOUR BUSINESS!
It will if your cash flow dries up, either sooner or later.
The Credit Protection Association (CPA) has been assisting thousands of UK businesses to get paid since 1914. We have seen many financial crises, this one will be particularly deadly for suppliers for sometime to come.
CPA eases cash from tardy debtors – Efficiently, Effectively, Economically and Ethically. Above all tactfully, because maintenance of goodwill is paramount.
To meet the needs of creditors in the current crisis, we have designed a “critical care” package especially tailored for the situation.
- The annual package costs start at very low rates
- A minimum performance warranty is provided
- Several complimentary services included
Clients instruct CPA on-line via their PC or phone, completely user-friendly. Your late paying customers are told to pay you direct (not to us).
No face-to-face meeting required – just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email nsm@cpa.co.uk today.
When you see your money come in, you will be so glad you used CPA.
Do you sell on credit?
With pressures on the cash flow it is essential that you stay on top of the credit limits you grant customers and watch carefully for any late payments.
Those customers will look for the easiest option to boost their cash-flow. Don’t let it be you.
You can’t just assume your customers can and will pay you eventually, no matter how big their name is.
It is essential to have credit management systems in place to monitor and check your customers credit worthiness.
It is also best practice to use a trusted third party like CPA to make sure you are paid on time by customers, no matter how good a name they have.
About CPA
The Credit Protection Association can help!
Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.
At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.
We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.
Companies in trouble usually have very bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.
If you supply on credit, help us help you identify the risks.
Why use a third party collector?
As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When your customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.
Over the years we have collected billions in overdue invoices for our customers.
Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.
You might be hesitant about contacting a debt collection agency. What are they going to be like?
Can they help your particular type of business?
There is no need for concern. CPA are courteous, helpful and very probably have had direct experience of working with your type of business.
Debt collection agencies are not all alike.
Success lies in both recovering money and keeping customers happy. The Credit Protection Association was founded in 1914 and has helped tens of thousands of UK businesses to collect outstanding payments and reduce the risk of incurring bad debt. We believe that creditors deserve to be paid for the work or goods they have supplied but we fully understand the need to maintain
the best possible relationship with customers!
At The Credit Protection Association, we provide solutions, advice and back-up in all areas relating to the supply of services or goods on account. Client-members receive everything they need from a single source to reduce debtor days and write-offs.
The Credit Protection Association has helped has assisted tens of thousands of UK businesses with their credit control requirements, since the First World War.
We are polite, firm and efficient when it comes to recovering outstanding debt.
“We have used CPA for a number of years now. The website is easy to navigate around with lots of helpful reports. The staff are always at hand and very friendly. CPA has helped us reduce our debt over the years and keep track of potential issues with our customers.”
~ CPA client in Buckinghamshire
“The service from CPA has proved to be everything that you said it would be. We have already seen a huge benefit. We have had a number of overdue accounts paid promptly and directly to us. It is also a huge weight off our mind to know that once we have passed an overdue payment over to you, you take care of everything whilst keeping us informed.
~ Credit Controller client in Warrington
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
Ready to speak to an advisor?
For help or advice on credit management, entirely without obligation.
Call us today
0330 053 9263
CPA is passionate about late payment
The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.
We are extremely passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.
If you were regularly paid late we can help. Those former customers used you to boost their own cashflow, regularly paying you late.
As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.
Under little used legislation, you are entitled to compensation for those late payments.
Now you can boost your own cash-flow.
CPA can help unearth the those hidden treasures.
We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.
Yes, CPA can help you boost your business cash-flow.
Don’t let your bankers control you, contact CPA today.
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
Do you realise you could be sitting on a fortune?
Late payments often result in a cash flow crunch and leave SMEs in need of a cash injection.
If you sold B2B on credit then there may be a hidden source of capital you can call on.
If you fancy an bit of extra cash in your business, rather than jumping through hoops with your bank, you could look to uncover the resources from an unexpected source within your own business.
Not many are aware but there could be a hidden fortune within your business, sitting there, just waiting to be uncovered and released.
We can help you uncover the pile of gold, you didn’t even know you were sitting on.
If you trade with other businesses and were often paid late then you could be entitled to significant compensation.
Under little known and under-utilised legislation your business could be due huge amounts in compensation that you didn’t even know about.
Let’s be clear – this is not a way to weaken any customer relationships you value. It is one that identifies who’s been paying late and then recover the potentially significant sums in compensation using Late Payment Legislation from businesses where the relationship has already ended.
You can pick and choose who you want us to follow up – but once we’ve agreed which companies you’d like to pursue compensation from it’s a fast process and there’s no financial outlay to you whatsoever. My team at CPA put its expertise to work to recover the compensation due and fight late payment culture.
That compensation could provide the cash boost your business needed.
But don’t delay, that compensation evaporates if not claimed within six years of the late payment.
How can CPA help?
CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hard work. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.
We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.
Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.
CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.
The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit. You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.
We do the work, you receive the cash.
If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.
We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.
We are helping business owners who are looking to boost the returns from their business before they retire. We are helping businesses who have lost major clients after years of loyal service to get properly compensated for systematic late payment. We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.
Those former clients who regularly paid you late can finally be made to pay.
Ready to speak to an advisor?
For help or advice on credit management, entirely without obligation.
Call us today
0330 053 9263
The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!
The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections
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The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections