Bank Relief Through Covid-19 and Taking Action

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Those of you following the Covid-19 charts may be worried at the continuing growth in the infections curve. What you need to keep in mind when looking at that curve is that it is a lag indicator, that is: it shows the result of the actions taken in the previous weeks and months.

The effect of the actions taken more recently and those that will be taken in the coming weeks and months is what will impact the infections curve of the future. If they were the right actions and there were enough of them, the curve would flatten.

Unfortunately, there is no such easily accessible curve or chart to monitor the impact on small and medium businesses. Even if there were, it will take some more time to see the results of the past few weeks.

That doesn’t mean we can’t see the future downside on businesses and the economy, which is why the government is taking action now.

However, the government’s current stimulus package may be little relief for some sectors like hospitality and tourism who have had their revenue streams severely interrupted and have had their, often, already stretched cash flow stretched further.

The big banks are also providing some assistance to their small and medium business customers. The assistance your business may receive will depend on the bank you’re with, but some of the offers put forward by the banks include:

  • A reduction in business loan interest rates
  • Deferring loan repayments on some business loans and overdrafts ranging from 3-6 months.
  • Waiving merchant fees for impacted customers (those with the bank’s payment terminal)
  • Waiving of fees and excess interest on some of their products

The above should provide some further cash flow relief for your business but speak to your bank manager to ensure your business gets as much assistance as you need. You may need to negotiate further assistance to what’s being offered and the only way to do that is to present your case.

Don’t let it end with the bank and obtaining extra funding.

  • Speak to your suppliers about deferring payments or getting discounts.
  • Speak to your landlord about deferring the rent or a rent-free period (it may cost them less than having to find a new tenant).
  • If you’re a business that relies on people waking in, speak to your regular customers about purchasing vouchers now to redeem in the future or offer customers discounts on vouchers or gift certificates.
  • If your customers can’t come to you, can you go to them? (offering home delivery for example).
  • Speak to your employees about how you can all work together to make sure the business survives.
  • Spend more time planning your cash flow so that you can see where and when you would need more assistance.

Your actions today will help you to stay ahead of the curve.

The information contained herein is of a general nature only and is not intended to be relied upon nor is it a substitute for appropriate professional advice. Whilst all care has been taken in the preparation of the material, it is not guaranteed to be accurate. Individual circumstances are different and as such, require specific examination. Asparq cannot accept liability for any loss or damage of any kind arising out of the use of or reliance upon all or any part of this material. Additional information may be made available upon request.

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