Budget - PwC comments on measures to mitigate impact of COVID-19 on businesses

Steve Russell, leader of PwCs UK restructuring practice, said:

“The emergency relief measures announced as part of the Chancellor’s £12bn three-point plan this afternoon for businesses should provide some welcome relief to companies experiencing the immediate impact of coronavirus. 

“The key to the success of these measures will be the speed at which the Government is able to support the liquidity requirements of the companies most in need. While the Government measures will provide breathing space for smaller businesses, some large corporates will face the same cash pressures. We will need to see whether this relief will be extended to all businesses irrespective of size. 

“The COVID-19 business interruption loan scheme will provide temporary support to lenders, mitigating the risk they face from small businesses requiring additional emergency funding during these uncertain times. The government will expect all financial stakeholders to abide by the spirit of these measures and not use the emergency funding package as an opportunity to improve their own positions.

“It is key for all companies impacted by COVID-19, irrespective of their size, to stabilise their cash and then consider all elements of their business to assess what efficiencies can be driven out of their working capital, operational processes and supply chains. Businesses that respond quickly will be the ones best positioned to bounce back once COVID-19 has been contained. 

“Companies have a wide range of stakeholders such as lenders, credit insurers, credit card companies, pension schemes, customers and suppliers, who will all be wanting information from management. It is crucial that companies engage early in discussions with these stakeholders as there is a risk that any information vacuum could be misinterpreted. In our experience, most stakeholders want companies to survive and thrive but they can only play their part if there is clear communication of the financial position and what is required of them.”

Ends.

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