A North East insolvency expert is advising regional businesses facing disruption to their cashflow resulting from the coronavirus outbreak to act early and quickly.
Alexandra Withers, chair of the North East committee of R3, the insolvency and restructuring trade body, was speaking after Chancellor Rishi Sunak announced a £330bn package of measures to help British businesses find their way through the difficult coming months.
And she is expecting more help to be required by businesses and business costs that aren’t covered by the measures announced so far.
Alexandra Withers, who is an associate solicitor in the insolvency department of Short Richardson & Forth Solicitors, says: “The Chancellor’s ‘Whatever It Takes’ strategy is the right one, but other types of help will be needed alongside the additional access to finance that’s been announced.
“Many businesses will face insolvency without significant creditor forbearance or direct help from Government to bridge the gap in their finances, and as well as additional money going into businesses, payment holidays for businesses on things like PAYE, National Insurance Contributions or other taxes will also help them manage their outgoings.
“There is no doubt that a lot of North East firms will either already be feeling pressure on their cashflow situations or will be able to see problems arising in the future, and there will be a wide range of different challenges facing different businesses in different sectors.
“The message that we’ve always sent to the owners and managers of struggling businesses to seek professional advice as soon as you think you need it will be relevant to all of them and it will be more important than ever that they take this approach in the coming months.”
R3’s members work across the spectrum of the profession, from the global legal and accountancy firms through to smaller, local practices.
Alexandra Withers continues: “Proactively tackling financial problems is crucial in maximising the chances of resolving them, and there are a wide range of tools and procedures that can be put in place to find a positive way forward.
“Business owners should also be talking to their customers, suppliers and creditors about their situations – many of them will doubtless be facing similar challenges and a collective approach to addressing particular situations is likely to be the best way forward for many.
“Being as flexible as possible with the way businesses are run is also important. There are lots of reports already of businesses adapting, for example by making delivery options available for goods, and remote working for services.
“Much of the work that R3 members do goes unseen and already helps to save hundreds of companies and thousands of jobs across the UK every year without businesses necessarily having to go through a formal insolvency procedure, and it will be crucial for firms to access this pre-emptive support and advice as early as they can.”