Are you Recession ready?

It's a term I've heard a lot this week from lenders -

"WE'RE GETTING RECESSION READY," and it didn't bode too well. Everyone's gearing up to handle what might lie ahead - are we already in a recession? how long will it last? how bad will it be? Well, the answer is unclear, but no doubt at all, business owners are finding it challenging right now, and it doesn't help at all having just come through the other side of the Covid challenges we all faced. Some businesses rose to that challenge and others sadly had to fold. One thing that did happen during the pandemic was business owners taking advantage of the government support schemes - CBILS, Bounceback loans, Furlough, VAT deferment, you name it, the Treasury came out in force supporting the SME sector. So much borrowing was done during this period that banks almost went into meltdown coping with the sheer volume. That borrowed capital has now been spent, beit cashflow, CAPEX, increased costs and overheads or simply just staying afloat.

It's time now to review what plans you have for your business over the next 12-24 months. Growth and expansion, moving or refurbishing premises, gearing up on stock, taking on extra staff, marketing and advertising, or any other projects on the horizon. How is this going to be funded? The saying "cash is king", is so true, and we would encourage all businesses to manage their working capital very closely over the coming months. Suppliers are extending payment terms causing financial pressure on SME's. If you are fortunate enough to have cash in hand right now, that's great, keep it that way as uncertainty lies ahead I'm sure.

Borrowing money and taking out a loan now to keep your plans on track is both brave and commendable - if your business allows it, don't be scared to gear up on finance. We will fully review your capability of maintaining repayments. Interest rates are still rising, however, fixed rates are available and credit appetite with lenders will no doubt be reined. We are already seeing some industry sectors facing restrictions. Having that comfort blanket with cash in the bank or being able to fulfill and grow your orders and services is vital for sustainability.

If you already have debt sitting on your balance sheet and are reluctant to take on more, we can provide a full review of your existing borrowing to ensure it's at the very best terms possible, a consolidation loan might free up some cashflow actually allowing you to indeed take on some more.

For a discussion whether now is the right time for your business to borrow money, call us now for a professional and independent assessment.