Survive the Downturn - Secure Your Funding

Extract from ICAEW report: 8 Ways To Survive The Downturn

Find out how reviewing requirements and exploring new sources of funding can help your business survive the downturn.

As the future becomes more uncertain, it is difficult to predict sales, profits and cash flows.

There is greater risk and the banks are likely to take a cautious approach to renewing facilities.


Review your funding requirements

It is essential that you regularly review your funding requirements over the next 12 months and beyond.

If you have a term loan or overdraft, be aware of any covenants or other conditions and constantly monitor how close you are to breaching them.

Prepare thoroughly if a review is coming up of any of your financing facilities.


Have contingency plans in place

If limits might be threatened ’think the unthinkable‘ and have contingency plans in place, such as the sale of assets.

When re-negotiating overdraft and loan facilities, be aware that banks are taking different approaches to interest rates, fees and charges. You may also be asked to give a higher level of security or a personal guarantee.


Explore different sources of finance

Make sure that you fully consider all types and sources of finance such as asset finance and invoice factoring and discounting. You might need new sources of finance if negotiations with your current providers prove difficult.

It is worth investing time talking to people about new sources of finance. Are there any funds available from the Government or local agencies?

These are unprecedented times and some larger businesses are offering their suppliers finance to maintain an increased supply of goods, so it’s worth exploring all your options.

Source ICAEW - full report can be downloaded by clicking here.