Specialist corporate finance advisory firm Shaw & Co has introduced a free online credit suitability check for businesses to assess whether they need and are eligible for working capital funding amid the pandemic.
The new “cashflow improvement service” is aimed at small- and medium-sized enterprises facing cashflow problems and requiring at least £1m of working capital to stabilise their business.
The survey, which Shaw & Co said takes less than 10 minutes to complete, allows businesses to provide information on their current working capital levels so Shaw & Co can spot if they need help.
The Covid-19 pandemic, its subsequent lockdown and social distancing measures have caused cashflow problems for some firms.
Shaw & Co said other issues that can lead to cashflow problems include: temporary cash shortage; regular working capital shortage; overtrading; turnover underperforming forecast; need of short term capital to fund growth; inappropriate capital structures; and financial distress.
“Managing cashflow effectively is an integral part of any business,” said Alexei Garan, head of debt advisory at Shaw & Co.
“The economic impact caused by the coronavirus pandemic has demonstrated how unprepared some businesses were to deal with large scale and prolonged cashflow challenges.
“Government loan schemes have provided some degree of cushioning however, we expect a ‘second spike’ of cashflow issues to come to the fore in the second half of 2020 and into 2021.
“It is vital that businesses are fully aware of their cashflow position and how critical it is for companies to address this issue.
“Failure to do so, is likely to increase the risk of potential failure and ultimately corporate bankruptcy.
“Understanding and addressing cashflow issues will undoubtedly involve making prompt changes to your operations, ensuring better collaboration across your organisation or adjusting your sales and marketing strategy to become more competitive.”