Covid-19 business news update 17th April 2020.

17th 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.

The US

US Unemployment Claims topped 5.2m last week, official figures have shown, as the coronavirus crisis crashes the economy and sends unemployment skyrocketing. The figure compares to 6.6m new claims last week. It takes the number of people who have made new jobless claims in the last month to an astounding 22m.

U.S. President Donald Trump unveiled guidelines on reopening the country’s economy that could provide leeway for states some to scrap most social distancing measures in four weeks. It marks a significant step back from Trump’s assertion earlier in the week that he had total power to reopen states, a claim that had state governors bristling.

Global stock markets are looking up after STAT news reported that a Chicago hospital treating coronavirus patients with Remdesivir, a drug produced by Gilead Sciences, in a trial were recovering rapidly from severe symptoms.


China reported a fall in GDP for the first time in 44 years. The economy shrank by 6.8% in the first quarter, compared with last year. The figure was slightly larger than the 6.5% decline forecast by analysts and reversing a six per cent expansion in the fourth quarter of last year. The COVID-19 pandemic was the obvious cause.

Of more concern however was the drastic fall in year-on-year retail sales in March, despite the reopening of many shops and restaurants

The UK

The British outbreak of covid-19 appears to be peaking. Some 13,729 people have died, but the daily death count is beginning to drop. Although Britain is among the worst-affected countries in Europe, the National Health Service has proved up to the job.

The rapid reconfiguration of services in existing hospitals, with elective surgery postponed, non-covid patients discharged and medics reassigned, has been so effective that the rapidly established field hospitals have seen little traffic. Nightingale, one such in London with space for 2,900 patients, had just 19 over the Easter weekend.

Lockdown sees one in four firms close

The Office for National Statistics (ONS) says Government measures designed to slow the spread of coronavirus has seen a quarter of businesses close down temporarily.

A poll of 5,316 businesses, saw 25% say they had closed between March 23 and April 5, while 38% of those that continued to trade said that their turnover was substantially lower than normal and 17% said it was slightly lower.

Over 40% said they were reducing staff levels in the short term, while almost 30% have decreased working hours. Just over a third of those surveyed said they had been unaffected by the lockdown.

In the fortnight before the March 23 lockdown, almost half of firms saw a dip in income, with this rising to 90% for hotels, cafés and restaurants.

IoD calls for clarity over furloughed directors

The Institute of Directors (IoD) has called for urgent clarification on what activities directors can carry out while furloughed, saying that Government advice is “conflicting” with information from HMRC more restrictive than guidance available online.

Roger Barker, head of corporate governance at the IoD, said new guidance, which appears to prevent a furloughed director, where no other director is available, from undertaking basic tasks “appears to raise a whole host of unintended consequences.”

He adds that is “hard to believe the Government has thought through the implications for small companies with only one or two directors.”

Mr Barker warned that directors of small companies “have largely been caught between two stools”, saying that as they “don’t fit easily into the support schemes that have established for employees and the self-employed” they need support and it is “past time government woke up to the problem.”

Insolvency: light touch, heavy cost

An FT column on a new insolvency process in Britain argues that a UK version of Chapter 11 could help reduce “extravagant fees paid to an oligopoly of services firms.”

COVID-19 may be the final straw for struggling hospitality firms

Begbies Traynor has warned that COVID-19 may be the “final straw” for many firms in Scotland’s hospitality sector.

The industry saw a sharp year-on-year increase in severe financial distress in Q1, with a 500% jump in instances of “critical” financial distress – with an 800% increase quarter-on-quarter.

Across the UK as whole, “critical” distress in the sector rose by a fifth year-on-year and 37% on the quarter.

Ken Pattullo of Begbies Traynor said that while government efforts to offer some support to businesses are welcome, “the reality is that this ‘sticking plaster’ approach may well simply delay the inevitable.”

Economy losing £2bn a day

Analysis suggests that the coronavirus lockdown has already wiped £50bn off the economy, with the Office for Budget Responsibility (OBR) estimating that the closure of schools, shops, offices and factories is costing Britain £2bn a day.

This means that some £50bn has been knocked off GDP in the 25 days since the restrictions were rolled out on March 23.

The sum is equivalent to 2.5% of GDP. While the OBR has suggested that economic output could slide 35% in Q2 if the lockdown stretches to three months.

The Resolution Foundation think-tank has suggested that the economy could then return to near-normal levels relatively quickly – with GDP down just 3% in the medium-term – while a six-month lockdown could see a slower recovery and add an extra £1.5bn a day to the national debt.

Credit card and home loan demand set to slide

The Bank of England (BoE) has forecast that demand for mortgages and credit card lending will decline in Q2.

The BoE’s quarterly credit conditions survey, conducted shortly before the Government imposed the lockdown designed to slow the spread of COVID-19, shows that lenders were planning to scale back the availability of such loans.

A net balance of -71% said that they expected demand for mortgages to rise in the coming months, while -23% anticipated that they would be issuing more loans.

On unsecured lending, a net balance of -26% of lenders expect to issue more credit, while -4.9% reported greater demand.

The balance of lenders expecting to increase credit to the corporate sector climbed to 28%, marking an increase of 0.8% and the highest figure since Q3 2009.

Howard Archer, chief economic adviser to the EY Item Club, said the survey offered “encouragement for small and medium-sized businesses”.

Scam warning over COVID-19

With warnings that criminals may be using anxiety and uncertainty over COVID-19 to attempt to defraud people, Action Fraud has revealed that it has received 105 reports concerning criminality involving coronavirus, while City of London police recently reported a 400% increase in coronavirus-related fraud.

James Jones, head of consumer affairs at Experian, notes that some crooks are pretending to be from HMRC, advising caution over emails and other correspondence claiming to be from the taxman.

Deloitte helps with PPE supply chain

Analysis of the Government’s efforts to enlist UK textiles firms to make personal protective equipment (PPE) for the NHS notes that that the Cabinet Office has only recently begun getting PPE from UK suppliers and has now outsourced the process to Deloitte, with the firm to help with the supply chain and coordinate with textile factories.

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

Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

The “Why” of the late payment culture.

New PM should walk the walk and back small firms over late payments

Paying late is “crack cocaine” to big business.

Late payment culture risks “spiraling out of control”

visit our late payment compensation page

See our full blog and FAQ on late payment compensation

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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Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

25 excuses for late payment and how to get around them.

Read our Cash Flow Advice

Read about our overdue account recovery service

Read our blog – What is credit management?

Read our blog – How to select a debt collection agency

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see our blog – 15 steps to avoid invoice fraud

Overcoming 5 common reasons for disputed invoices

As insolvencies rise, could you spot these warning signs in your customers?

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections