Tel: 0151 363 8436


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, at whatever economic cost, and this should be applauded.
That said, the 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 released? Will the UK be exposed to a second peak? And when will Corporate UK be fully reopened for business?
Prudently speaking, I would expect the answer to all these questions to be answered at some point later this year
On this basis, life for most SME business owners should by Christmas 2020 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.

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 being rolled out to companies as I write, I expect there to be a sizable downturn in business closures and insolvencies in the short-term. I recommend any business owner considering closure first seeks the advice of a licensed insolvency practitioner to correctly determine whether you have a historical underlying issue or a COVID 19 driven one.

Assuming the problems your business is facing are driven by the Coronavirus, the protective regime for businesses currently being rolled out is at an unprecedented level for the UK, with £330 billion plus (to date) being made available in support.

Is Government Support Going Far Enough?

However, and not diminishing in anyway how brilliant this is, the catch is that the support for the majority is primarily one of ‘cash flow support’. i.e. via loans, such as CBILS and the deferment of HMRC payments.
This must not be mistaken for ‘free money’ in anyway. CBILS loans are only interest free for 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 represent only 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.

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 in 2021.
Therefore, we have 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 virtual meeting or a telephone call to discuss any questions or concerns you may have during this difficult and uncertain time.

linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram