Graeme Lipman, BTG, advises companies to take early advice to cope with heightened cash flow pressures

The coronavirus pandemic has caused unprecedented levels of business disruption to companies across the UK. Barely any sector has found itself immune to its devastating impact and even with restrictions on trade now lifted, the ripple effect of Covid-19 is set to be long-lasting.

What we're seeing at present is the start of a perfect storm with accrued liabilities all rearing their collective heads at the same time; be it Bounce Back Loan repayments, CBILS repayments, deferred VAT, deferred landlord and rent payments, and soon the end of the furlough scheme. All these measures were put in place to act as a crutch for businesses throughout the pandemic and whilst Covid is here to stay, we know that government support certainly isn't.

As welcome as those initiatives were, for many businesses it's now a case of factoring in these additional repayments on top of trying to get business going again - which is proving to be challenging. Although many had no choice at the time, loading borrowing onto an already struggling company is often a recipe for disaster. If you are unable to meet the monthly repayments on your Bounce Back Loans, or any other form of finance you took out to get your business through the Covid pandemic, you need to seek expert advice.

Even if you didn't take out additional borrowing to help survive the crisis, you may still be suffering with the lasting effects. Perhaps sales have never fully bounced back to pre-Covid levels, or maybe your cash flow is still feeling the squeeze after months of limited trade. Maybe the upcoming VAT bill is filling you with dread. Whatever problems you are facing, rest assured you are not alone.

While the Covid pandemic caused unprecedented business disruption almost overnight, recovery is not going to be as quick - however, there are a number of business rescue and turnaround solutions which could put you on the right track.

We speak to company directors every single day who are still feeling the effects of the pandemic. We take the time to understand your current situation and work alongside you to put a plan in place which will give your company the very best possible chance of turning around its fortunes and looking ahead to a brighter future.

We're already seeing some green shoots of recovery since trading restrictions were lifted in April, but we're also seeing a rise in liquidations too, so directors need to take stock of their financial situation.

Graeme Lipman, Director at Begbies Traynor, commented:

"While many businesses opened their doors in April and started getting back on their feet, this led to a decrease in levels of significant distress levels. But some businesses quickly realised they couldn't manage the accrued liabilities over the previous 12-15 months. Many SMEs saw arrears building up throughout the pandemic such as landlord and rent payments, VAT, PAYE, and on top of this we saw Bounce Back Loan repayments beginning in May. You can understand why an increasing number of SMEs were simply unable to cope with the heightened cash flow pressure upon re-opening which has led to a rise in voluntary liquidation processes.

"So, the overall picture since April is healthier but with the caveat that some businesses, that just about kept their heads above water throughout the pandemic, are now starting to fall away.

"We can provide the early advice you need to help put in place a rescue process that can hopefully steer your business away from closure."

Graeme Lipman is a finance specialist and director at BTG Advisory, with a wealth of experience in business rescue and turnaround.