Covid19 lockdown business news update 7 May 2020.
7 May 2020.
James Salmon, Operations Director.
The Covid19 lockdown continues and we are having to make do in a new normal.
Here are CPA we want to share the business news stories we have seen that we think will affect our members and readers. Many of us are busy fighting to protect our businesses and therefore might have missed some of the news that could impact small businesses, their owners and those that sell on credit.
Covid19 general news
The UK’s covid19 lockdown looks likely to begin easing from Monday according to statements by Prime Minister Boris Johnson, as he promised to announce further details to the nation this weekend.
“We will want, if we possibly can, to get going with some of these measures on Monday,” The PM told Parliament. He said he will set out the next phase of the coronavirus strategy in a public statement on Sunday because it would be a “good thing” if people know what to expect before the changes come into operation the next day.
“What people want to see is a careful, sensible program attracting the widest possible support to continue to suppress the disease right down but to allow our economy to start up again”
As part of its plans to exit the lockdown, the government has already said it will roll out a mass program of tracking and tracing covid19 cases. Speaking in Parliament on Wednesday, Johnson set a new goal to raise the testing capacity to 200,000 tests a day by the end of the month, Currently we are testing 108,000 a day.
Heathrow Airport bosses have told MPs that they are trialing large-scale temperature checks as the aviation industry struggles with covid19. They said they are already being carried out at departure gates on people going to places where this is a requirement.
Just a day after President Donald Trump announced the winding down the White House’s covid19 task-force, he tweeted that the group would instead stay active but shift its focus towards safety and reopening the country. The virus continues to ravage America with more than 2,000 people dieing from covid19 on Wednesday.
Markets.
The FTSE100 barely budged yesterday, rising 4 points to 5853. US markets were mixed with the S&P down .7% but the Nasdaq up .5%
Oil Prices moved between gains and losses on Wednesday as investors weighed optimism over reopening economies against ongoing oversupply fears. But pressure is on the upside as China is increasing imports.
The Bank of England said the UK economy could shrink by as much as 14% in 2020 before rebounding strongly in 2021 as it kept interest rates on hold at current record lows.
Sterling recovers mildly today after the bank of England left monetary policy unchanged as widely expected. Two members voted for an increase in asset purchase but that was shrugged off by the markets.
Small firms secure £2bn in bounce-back loans in first 24 hours
Bounce back loans
More than 69,000 loans for UK Small Businesses that need help to bounce back from the covid19 crisis were approved within the first day of the scheme launching.
Firms pocketed more than £2 billion in approved loans in the first 24 hours, with much of the money being paid out just one day after the loans were given a thumbs-up by lenders.
The number represents 53% of the 130,000 applications lodged by businesses trying to access cheap funding through the Bounce-Back Loan Scheme (BBLS), which launched on Monday morning as part of the government’s response to the covid19 lockdown.
The government-backed loans are worth up to £50,000, capped at 25% of a firm’s turnover, at an interest rate of 2.5%.
Mike Cherry, the national chairman of the Federation of Small Businesses, said despite a “promising start” for the bounce-back scheme, some firms were still reporting difficulties. He said: “Many of the most vulnerable business owners – particularly sole traders – only have personal banks accounts and, as a result, are being told they cannot access a bounce-back loan. It’s vital that they are helped to secure the finance on which many will depend to make it through this incredibly challenging time”.
It is also reported that if a business does not have an account with one of the accredited lenders they face a long wait. Mr Cherry added that alternative lenders should be signed up rapidly to improve the reach of the scheme.
Companies are dangerously drunk on debt
The FT features a column urging changes in debt taxation, bonus rules and pensions to address “the iniquities of the current system,” which remains vulnerable to future crises.
We need less than a week to restart, small businesses say
A survey by the British Chambers of Commerce (BCC) reveals that Britain’s smallest businesses would need less than a week’s notice to restart operations.
Only 3% of businesses said they would need more than three weeks’ notice to get back up and running once lockdown restrictions are eased, the BCC’s coronavirus business impact tracker found.
Elsewhere, a poll of members by the Institute of Directors found just 49% of firms believed that they could “operate viably at pre-lockdown levels” while maintaining social distancing rules.
“Social distancing presents an unprecedented challenge for firms and some may be simply unable to make it work,” said the IoD’s Jonathan Geldart.
Hiring activity plummets to 22-year low
Data from KPMG and the Recruitment and Employment Confederation (REC) found hiring activity fell at the sharpest rate in 22 years last month with the survey also finding a record drop in overall vacancies and a steep rise in the availability of candidates.
The REC is calling for the lifting of government support to be tapered to prevent more redundancies. James Stewart, vice-chair at KPMG, said: “The pandemic continues to wreak havoc on the UK jobs market with a record drop in vacancies and recruitment plans frozen.
We estimate as many as 13m jobs are highly affected by the lockdown, just over a third of all jobs. It’s an unprecedented situation for UK business, and resilience, then recovery, is key to navigating through the crisis. All eyes will be on the forthcoming announcement on easing restrictions so confidence can start to rebuild.”
Business demands clarity on easing lockdown
Business leaders are calling for comprehensive forward guidance from the government on what restrictions could be lifted and when as bosses grow increasingly impatient for a clear route out of the lockdown.
Adam Marshall, director-general of the British Chambers of Commerce, said businesses “know government may have to pause or change the process based on new scientific advice, but need some guidance in order to plan effectively for restart.”
Meanwhile, MakeUK, the manufacturers’ trade body, has published a plan for the sector’s recovery which includes extending support while demand is gradually lifted back to pre-crisis levels.
Elsewhere, Jonathan Athow, Office for National Statistics deputy national statistician for economic statistics, has said the UK economy will face a “significant decline” in the first half of the year.
Business rates revaluation postponed in light of pandemic
Communities secretary Robert Jenrick has confirmed that a business rates revaluation has been postponed, as the government seeks to provide more clarity to businesses affected by covid19 lockdown restrictions.
Kate Nicholls, chief executive of UKHospitality, remarked: “Delaying is a pragmatic move at such a demanding time for businesses. It is vital that the revaluation occurs afresh after the crisis to reflect the impact of COVID-19 on commercial property costs,” while Gerry Biddle, business rates lead at Deloitte, added: “Property values as at 1st April 2019 will no longer be used and businesses will likely benefit from a recalculation at a later date.”
GPs and local authorities complain of lack of COVID-19 results
The Guardian reports on complaints from local authorities and GPs that coronavirus tests carried out at privately run drive-through centres in England have not yet been shared. A lack of data from the tests, which are being conducted by Deloitte, leaving doctors and councils with “absolutely zero information”.
European Purchase Managers index
The euro bloc’s composite purchasing managers’ index dropped to 13.6 in April from March’s previous record low of 29.7. Restrictions put in place to slow the spread of Covid19 led to not only a sharp drops in activity, but also sharp drops in new business.
April’s survey also showed a record fall in new export sales.
This data was followed up with the EU warning that eurozone gross domestic product will contract 7.7% this year.
EU officials did however estimate that Eurozone GDP growth should rebound to 6.3% in 2021
Eurozone contraction threatens single market
Economy commissioner Paolo Gentiloni warned that the divergence in the depth of the recession across different countries would pose “a threat to the single market and the euro area.”
The forecasts came as a purchasing managers’ index (PMI) survey of businesses revealed that activity in the eurozone collapsed to the lowest level on record in April. The composite PMI fell to an unprecedented 13.6, down from March’s previous record low of 29.7.
Britain, which remains in the single market and customs union until the end of the year, is forecast to contract by 8.3%. France will be hit almost as hard, with a forecast contraction of 8.2%, while Germany is set to suffer a predicted fall of 6.5%.
Southern states are expected to see contractions closer to 10%.
Clarks brings in Big Four firms for potential restructuring
Shoe retailer Clarks has brought in Deloitte to advise the company on a potential restructuring, raising concerns of more store closures amid the COVID-19 pandemic.
Fellow Big Four firms KPMG and PwC will be advising the family shareholders and the syndicate of Clarks’ lenders, respectively. Last year, the retailer warned that it was under “significant stress” following a sharp decline in sales, and that it would make a “meaningful” number of store closures.
These problems have been further compacted by the lockdown measures.
A spokeswoman for Clarks said: “Our leadership team is currently reviewing all options to protect our business, our people and the Clarks brand for future long-term growth. It is our policy not to comment on specific commercial appointments.”
Uber to axe 3,700 staff
Uber has announced plans to cut 3,700 full-time staff with the company saying the reductions will come from its customer support and recruiting teams. The firm saw demand for its taxi services fall by more than 60% in coronavirus hotspots during March.
Debenhams to close five stores after lockdown ends
Debenhams has confirmed that another five stores will not be re-opening after lockdown restrictions are lifted.
In a statement the retailer said: “We can confirm that despite our best efforts, we have been unable to agree terms with Hammerson on our five stores in its shopping centres, and so they will not be reopening.”
Debenhams fell into administration for the second time in a year last month, with FRP Advisory brought in to help get the business in the best possible position for when restrictions are lifted.
US Unemployment
In the US over 20 million jobs were lost in the in April, payroll processor ADP said on Wednesday, warning that the data doesn’t yet reflect the full impact of Covid-19 on employment. The report showed that the worst-hit sector was leisure and hospitality, in which 8.6 million jobs were lost.
House moves behind £19.4bn in lost pensions
Research by the Association of British insurers (ABI) suggests there are about 1.6m pension pots worth £19.4bn which are going unclaimed due to savers failing to contact their pension provider when they move house.
Don’t let Covid19 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