Business news 7 October 2020.

James Salmon, Operations Director.

Struggling SMEs locked out of bounce back loans, Finance bosses issue warning over zombie companies, BBLS losses could top £26bn, IMF chief warns of hard recovery, consumers upbeat but still not prepared to splash out, covid-19, market and other business news.

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.

Struggling SMEs locked out of bounce back loans

City AM reports on the small businesses unable to get state-backed bounce back loans because lenders are turning down new customers. Just five of the 28 accredited lenders are currently accepting applications from new customers, despite Chancellor Rishi Sunak extending the deadline for applications to 30 November. David Clarke, chairman of the Fraud Advisory Panel charity, says banks are wary of fraud with lenders having now tightened checks “so much that genuine companies are being denied help which seems unfair.”

Finance bosses issue warning over zombie companies

Oliver Baete, the CEO of Allianz, has warned that government loans are camouflaging the underlying economic effects of the pandemic. Speaking at the Wall Street Journal’s CEO Council, he said: “We have a lot of zombie companies now that are just surviving because they are getting government money, we have a lot of jobs around furlough or part time that will be lost, certainly in 2021.” Baete went on to say that households were proving more resilient than many thought and that government spending needed to shift from consumption to investment following the COVID-19 pandemic. Speaking at the same event, Santander executive chairman Ana Botin added that it was important not to withdraw stimulus or support too early but “companies that deserve to be alive” should be supported.

BBLS losses could top £26bn, NAO says

Analysis by the National Audit Office suggests British taxpayers could lose £26bn on the Government’s Bounce Back Loan Scheme due to a lack of credit controls and exploitation by criminal gangs. The audit office forecast costs of between £15bn to £26bn based on losses of between 35% and 60%, on the assumption that lending reached £43bn. But a worse-case scenario puts defaults as high as 80% or £34bn. A government spokesman said: “Our loan schemes have provided a lifeline to thousands of businesses across the UK. We targeted this support to help those who need it most as quickly as possible and we won’t apologise for this. Any fraudulent applications can be criminally prosecuted for which penalties include imprisonment or a fine or both.” The Mail’s Alex Brummer comments: “This whole episode is a warning of the dangers of being seduced by well-intentioned but badly-thought-out credit plans. Authors of Boris Johnson’s 95% mortgage loans have been warned.”

British Businesses borrowed 50% more in the second quarter of 2020 than in the whole of the previous year as the coronavirus crisis hammered the economy. Businesses borrowed a total of £34.5bn in the three months to the end of June, according to a report by banking lobby group UK Finance – 50% more than the total for the entirety of 2019.

IMF chief warns of hard recovery

International Monetary Fund Managing Director Kristalina Georgieva said on Tuesday that governments must continue with fiscal and monetary support or risk their economies crashing again. The IMF will make a small upward revision to its global economic output forecasts next week, Georgieva said, adding: “My key message is this: The global economy is coming back from the depths of this crisis. But this calamity is far from over. All countries are now facing what I would call ‘the long ascent’ – a difficult climb that will be long, uneven, and uncertain. And prone to setbacks.”

Consumers upbeat but still not prepared to splash out

A survey by PwC reveals consumer confidence had rebounded back to pre-pandemic levels, and was now the highest it has been in September for seven years as people are “genuinely confident in the strength of their personal finances”. Despite the confidence, PwC said the majority of people were planning to cut back their spending in almost every area.

Employers planned 58,000 redundancies in August

Statutory filings indicate that employers planned to make 58,000 workers redundant in August. Some 966 separate employers informed the Government of plans to cut 20 or more jobs – more than four times as many as during August last year, according to the BBC. The figures are lower than during June and July, with 150,000 job cuts indicated during each.

Sunak prepares new support for businesses hit by local lockdowns

The Chancellor is preparing new support measures for those businesses worst affected by new local lockdown restrictions. The new package comes ahead of a new three-tier local lockdown system designed to end confusion over Covid restrictions.

Covid-hit companies facing £6bn rise in business rates, CBI warns

The CBI has warned that unless the business rates system is changed the tax would cost companies in England at least an extra £6bn before 2026.

Freeports set to open next year

Rishi Sunak has announced that freeports will be opened within a year stating that bidding for “freeport” status will start soon. The tax-free trade zones will allow goods in these areas to be able to be imported, stored, and exported without tariffs being imposed. The Chancellor said: “Our new freeports will create national hubs for trade, innovation and commerce, regenerating communities across the UK and supporting jobs. They will attract investment from around the world as we embrace new opportunities following our departure from the EU, and they will be a key driver for economic recovery as we build back better.”

Covid-19 general news

Cases pass 35.8 million and deaths top 1.05 million

Hospital admissions in England returned to highs last seen in late June

GlaxoSmithKline and Vir Biotechnology said a study of candidate VIR-7831 as a treatment for Covid-19 has been expanded into phase 3. At the end of September, the independent data monitoring committee recommended continuing the Comet-Ice study into phase 3 based on positive safety and tolerability data from phase 2.

Russia recorded its highest daily number of coronavirus infections, 11,615, since 11th May.

President Donald Trump accused the Food and Drug Administration of carrying out a “political hit job” against him by setting new vaccine review guidelines

Even mild Covid-19 cases can lead to symptoms for months


The FTSE 100 closed flat yesterday day in a mixed day of trading. Britain and the EU are close to agreement on reciprocal social security rights for their citizens after Brexit, two diplomatic sources said, with one describing talks last week on an elusive trade deal as “one of the most positive so far”.

Dollar and Yen staged strong rebounds overnight, as stocks tumbled after US President Donald Trump halted stimulus talks abruptly. President Donald Trump said he was ending negotiations with congressional Democrats over a stimulus package intended to help tackle the effects of the pandemic, at least until after the election on 3rd November. Though, markets somewhat stabilized in Asian session.The S&P 500 dropped -1.40% and the NASDAQ dropped -1.57%.  Budget talks between Democratic Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin began in July. Democratic presidential nominee Joe Biden said Mr Trump had “turned his back” on the American people.

More volatility are still anticipated ahead with eyes on US politics and coronavirus infections. It’s just early in October and more surprises could be lying ahead for us.

Oil prices fell on this morning after President Donald Trump dashed hopes for a fourth stimulus package to boost the coronavirus-hit economy in the United States, and on a larger-than-expected increase in US crude inventories

Gold Prices edged up in early trade, after hitting a one-week low in early trade, lifted by renewed fears over economic recovery and uncertainty around the US presidential election after President Donald Trump’s COVID-19 diagnosis. Technically, Gold’s breach of 1881.30 support is taken as a sign that Dollar might be coming back

Restaurant Group

Restaurant Group today said it had a good start to the first half of 2020 which was then marred by Covid-19 leading to losses widening, with the outlook uncertain. Restaurant chain Wagamama Group , part of Restaurant Group, posted a second quarter revenue of £8.5 million, plummeting 90% from £88.3 million year-on-year. In the first half, Wagamama’s revenue dropped 48% to £90.8 million from £173.9 million a year prior

Frasers Group

Mike Ashley is facing a shareholders revolt at the Frasers Group AGM today, following claims that employees were forced to work while furloughed during the lockdown period. Shareholder advisory service Pirc has recommended that investors oppose Ashley’s re-election as chief executive of the retail group, which was formerly known as Sports Direct


Tesco posted a 29% rise in first-half profit and hiked its dividend as households stocked up on groceries during the pandemic. Pre-tax profit for the six months through June increased to £551m, up from £428m year-on-year, as revenue edged up 0.7% to £28.7 billion.

Banking industry sounds alarm on Johnson’s housing plan

Eric Leenders, managing director of personal finance at banking trade body UK Finance, has warned against irresponsible lending after Boris Johnson promised a big increase in low-deposit mortgages for first-time buyers. The PM told the Tory party conference yesterday that he wanted to expand home ownership by giving “first-time buyers the chance to take out a long-term, fixed-rate mortgage of up to 95% of the value of the home – vastly reducing the size of the deposit.” Mr Johnson said the policy could create two million more owner-occupiers.


Sunak to hold off on tax hikes until the dust settles

A day after saying that the Tories had a “sacred responsibility to future generations to leave the public finances strong” the Chancellor has signalled that he will hold off on tax rises and Budget cuts until the UK’s economic recovery is further along. Rishi Sunak told Sky News that he would restore the public finances to a more sustainable level “over time” as the country’s main priority now should be restoring jobs and getting the economy moving again. HIs comments come as Tory MPs back a call from the Institute of Economic Affairs for the top rate of income tax to be capped at 40% and for VAT to be slashed to 17.5% for all industries.

Practical difficulties and low revenues mean a wealth tax won’t work

With the idea of a wealth tax becoming more popular amid the coronavirus downturn, the Telegraph’s Russell Lynch explains that fewer countries impose one on their citizens now than in 1990 due to the practical difficulties of such a levy and the relatively low revenues. There are now just four developed countries using a wealth tax: Spain, Norway, Switzerland and Belgium. That compares with 12 in 1990, according to the OECD. Helen Miller, deputy director of the IFS, says wealth taxes “have never raised very much money” and they are notoriously hard to design without creating distortions. That is before the administrative issues are considered. “The big challenge of practicality is that we don’t have a comprehensive measure of people’s wealth,” Miller adds. Lynch goes on to cite Labour chancellor Denis Healey, who in his memoirs said, “you should never commit yourself in Opposition to new taxes unless you have a very good idea how they will operate in practice. We had committed ourselves to a wealth tax: but in five years I found it impossible to draft one which would yield enough revenue to be worth the administrative cost and political hassle.”

Whitehall consultants earn £450m in fees

Fresh analysis shows Government spending on consultants has risen by 45% to more than £450m in three years, with Deloitte the biggest winner, earning fees of £147m from public funds in 2019-20, compared with £40m two years earlier. PwC was the second biggest-earning consultancy from the public purse last year, receiving £106m. Over the last year, EY earned fees across Whitehall worth £75m, while KPMG was paid £57m from government departments.

Clarks set to close stores

British shoemaker and retailer Clarks is set to close as many as 50 stores as part a rescue deal worth more than £100m. Deloitte is believed to be advising on a company voluntary arrangement the company previously denied was under consideration.

FCA takes action on fraud related to pandemic

The Financial Conduct Authority (FCA) has introduced new sandbox services under which companies can innovate new products while avoiding the usual regulatory obstacles, in a bid to stamp out coronavirus-related fraud. The watchdog said applicants who can “detect and prevent fraud and scams, support the financial resilience of vulnerable consumers and improve access to finance for small and medium sized enterprises” are being sought, with director of innovation Nick Cook adding: “The FCA is a strong believer in the positive power of innovation. Today we are strengthening the range and scale of support we are providing to innovative firms to deal with the challenges raised by the pandemic.”

Bereaved face hardship amid inheritance delays

The accountancy firm Moore has warned that probate applications are now taking three times longer than they were pre-coronavirus, leaving heirs and other dependants facing long delays before receiving any assets that have been left to them. “Probate delays put a lot of heirs in a really tough spot financially,” Lynne Rowland, partner at Moore, says. “Executors can be held personally liable for any payments made from an estate before the grant of probate is obtained, so they are often understandably reluctant to transfer funds to a beneficiary without the grant being in place. One month of that is difficult but three months or longer is unsustainable for many beneficiaries.”

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).

A very recent report shows a 23% increase in the number of unpaid invoices since March 11th THIS YEAR – are you getting a build-up of late payers?

Right now, overdue accounts must be a concern and CPA has a great track record of encouraging slow-payers to pay their suppliers quickly.

It takes less than 17 minutes to see how you would benefit, do you have the time now?

No face-to-face meeting required – just call Peter Uwins, CPA’s National Sales Manager, on 020 8846 0000 (business hours) or email 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.

You put up with the PAIN – now claim the GAIN!

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.

Did you know that your business is entitled to a minimum of £40 for every commercial invoice paid late to you over the past 6 years?

How many of your invoices are paid late each month – 20, 50, 100 or more?

At £40 per invoice that’s claim of £57,600, £144,000, £288,000 plus interest. The more invoices the bigger the claim! 

At £100 per invoice it’s £144,000, £360,000, £720,000 plus interest.

For over 20 years, CPA has calculated and recovered Late Payment Compensation on behalf of Clients!  

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.

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Read our Cash Flow Advice

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Read our blog – What is credit management?

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