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The Economic Fall out 
for Small & Medium Enterprises

Stuart Kelly – FCCA, FABRP 
Managing Director at SPK Financial Solutions Limited

Liquidation Service in Liverpool

Our health versus our economy?

The economic reality of the Coronavirus is that no matter what hardships our economy faces and how desperate our finances appear, one day our economy will be resurrected.
Of that there can be no doubt. Unfortunately, we cannot say the same for those loved ones who are tragically lost to this pandemic. Our nation’s health is therefore rightly being prioritised by our Government and this should be applauded.
That said, a full economic resurrection will be neither soon nor speedy for most. There is presently huge uncertainty as to the answers to questions such as……When will ‘lock-down’ conditions be fully released? Will the vaccines be as successful as we hope? And when will Corporate UK be fully reopened for business?
Prudently speaking, assuming the vaccine roll out continues at the current rate, and its effectiveness is sustained, then the Government’s ambitions of June 2021 for a full release of lockdown conditions appears achievable.
On this basis, life for most SME business owners should by summer 2021 be one of assessing the damage caused and the losses incurred. Owners will have begun the process of mapping out a rebuilding plan to try to recover their business back to a pre-Coronavirus level.
Liquidation Service Liverpool

Today’s challenges? 

The challenges facing SME’s today are therefore, “How can I survive that long?” And, “Should I survive that long?”
By asking this, what I am saying is that it is imperative that a business can differentiate between whether they are suffering due to COVID 19 trading restrictions or whether there has been a more fundamental issue with the business prior to Coronavirus.

This is now a key consideration that insolvency practitioners must factor into their assessment as to whether a company is insolvent and advise accordingly. If your company is considering closing-down in the next few months, please think twice……. Given the Government support that is continuing to be rolled out to companies, we have seen an unprecedented fall in business closures, despite the enormous economic downturn since the beginning of the pandemic.

Any business owner considering closure, should first seek the advice of a licensed insolvency practitioner to correctly determine whether you have a historical underlying issue or a COVID 19 driven one. This may materially impact how best to resolve your company’s problems.

Is Government Support Going Far Enough?

Not wishing to diminish how unprecedented the extent of UK Government support has been to businesses, but the catch is that the support for the majority is primarily one of ‘cash flow support’. i.e. via loans, such as CBILS, BBLs and the deferment of HMRC payments.
This must not be mistaken for ‘free money’ in anyway. CBILS and Bounce Back Loans are intended to be interest free for only 12 months and HMRC will be seeking recovery of deferred tax due in 2020 through 2021 repayments. The available Government grants are only available to specific businesses in specific sectors and only represent a fraction of the support being offered.

The payment of 80% of wages to furloughed employees is a fantastic move that will preserve many jobs in our labour market. By definition though, it can only apply to non-working employees and therefore the cash flow burden to businesses attempting to continue to trade on remains.

Insolvency and Liquidation Service Liverpool
Has your business been deferred?


As Licensed Insolvency Practitioners, we at SPK Financial Solutions are acutely aware of the challenges that many businesses are facing now and will likely face beyond the relaxation of lockdown measures.
We have therefore decided to provide FREE ADVICE to all SME business owners who would like it.

Sadly, we can’t come to see you at the moment. However, If you get in contact with us (and please don’t hesitate!) at:

We can set up a Zoom meeting or a telephone call to discuss any questions or concerns you may have during this difficult and uncertain time.

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