On 21st December 2022 the Government announced more support for businesses including grants for hospitality and leisure, discretionary grants for other businesses available from local authorities, theater and museum funding and statutory sick pay changes. Covid recovery loans were also extended to June 2022. Even with all this in place, the average business affected by Covid-19 may cease to be viable.

Covid-19 has negatively affected businesses in many ways since 2019. For some, regular closures have had a major impact on profit margins, with outgoing costs such as rent continuing whilst the business is not making money. For others, the rising cost of products at wholesale have pushed profit margins down. Staff absences will have added cost alongside loss of revenue due to a general decline in income amongst potential customers. This has been a difficult period for many businesses with a high percentage now not being viable despite taking support packages and loans offered throughout the pandemic.

With all this in mind, is there hope for the future of businesses during the pandemic? The answer is a complicated yes. Businesses that are no longer viable may find their best option is insolvency and this would involve closure of the business in question. However directors would be able to trade again under a different business so for many, this would be a great alternative to a seemingly never ending spiral of debt, especially if directors and employees qualified for redundancy payments during the insolvency. Not forgetting that bounce back loans were 100% backed by the Government provided they were used properly and the company was viable at the time it took out the loan.

For others, survival may be based on change and adapting to the current climate. Thinking about how a business can adapt to meet current needs may just save a business. A restaurant developing an outdoor area or outside catering and take away service, a shop moving online etc could be the way forward for some.

Covid-19 is something we all thought would be gone by now and a lot of businesses were acting according to that belief throughout the last two years, leaving many in a difficult position moving into a 2022 that seems to be possibly even worse than the last two years. 

If your business is facing any of the issues discussed in this post, feel free to get in touch via this online form and one of our specialist advisers will give you a free call to talk through your options.