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Speed is of the essence to save our SMEs

Response from Optimum Finance CEO Richard Pepler to the latest set of economic support measures announced Friday 20 March:

I’ll focus here on the newly announced measures being offered to SME business owners designed to prevent business failure and mass redundancies.

While the government’s sentiment of backing business is to be applauded we currently find ourselves in a state of paralysis, there is no obvious cure or end in sight and we can only make choices based on a single point in time – which is changes daily.

Here’s a breakdown of your options if you are one of the estimated 5.9 million SME owners looking for the commercial antidote to the current situation and some words of caution along the way:


The government’s introduction of the CBILS (Coronavirus Business Interruption Loan Scheme) is offering limited companies the chance to access loans via the usual high street banks to get them through the next few months of impending losses.

This week (23 March) marks the start of applications to this scheme. But my advice is to beware of what you are signing up to and make sure you are confident it is the right option for your firm. 12 months’ interest free period sounds great – but you must consider your recovery phase. My prediction is that even when we begin to see the green shoots of productivity returning, that commercial confidence will have received such a blow that a true upturn may be a way off.

Debt is still debt – so be mindful that taking a loan now still means you will be liable for repayment. We are working with our clients to release funds from invoices they have already issued (invoice finance) – therefore the cash is theirs. This really should be a first port of call before debt is considered.

Deferred HMRC payments

For VAT registered firms – the next quarter’s VAT payment (if it falls between 20 March 2020 and 30 June 2020) will not be due until the end of this financial year (March 2021), but it will still be liable and you must still submit your return at the end of the period as usual!

For self-assessment (the majority of company directors) you will now not have to make your July 2020 payment – this will now be due in January 2021, but again be mindful, this means in January you will also potentially have to make a payment on account for the following year.

Coronavirus Job Retention Scheme

Perhaps the most eagerly anticipated of measures is support for businesses to be able to keep their employees.

Redundancies have sadly been taking place for several weeks now so anything that offers a lifeline to employers is welcomed. However, speed is of the essence. For many it’s payday this week or next week and cash in the bank is needed now. Fixed regular costs will also fall due and many will have a quarterly office or premises rent payment to find.

We have yet to see the small print and a number of questions need to be clarified before we know how this will work in practice. Here’s what we know so far and what we need answers to:

  • The scheme will provide 80% of staff salaries who would otherwise have lost their jobs. The scheme is currently valid for three months backdated to 1 March. It’s not clear yet exactly what information will be needed to apply for this lifeline
  • It looks likely the HMRC will create a new portal where employers can upload details of staff they would have made redundant – we are waiting for details of this process. No doubt there are people working frantically behind the scenes on this
  • Staff affected will be placed on ‘furlough’ this means that will NOT be able to work. But how this will be policed to stop fraudulent claims or anti-avoidance and also whether the scheme can be flexible enough to enable employees to be released from this work status (even temporarily) in the event new work comes in – remains to be clarified
  • Speculation is that the cash for this measure will come in the form of a reimbursement by the end of April – this is quite a way off given how fast things are moving.
  • We’ve already seen pressure on mobile networks, issues with broadband speeds due to so many more home workers and supermarket websites crashing under the strain of increased traffic. Does HMRC have the right infrastructure to handle potentially millions of inbound applications to this scheme? Time will tell. If not the level of frustration and stress for business owners may get worse before it gets better
  • It’s been published that the scheme is available to employees up to £2,500 earnings – is this gross or net? If gross, what about pension and other deductions, not to mention employer’s NI and income tax deductions? Payroll teams could prove to be very busy in the coming months as they battle to navigate a new system.


Sector specific support

Grants for certain businesses in the hospitality and retail sectors are available alongside business rate holidays (but not all firms will be eligible).  These are perhaps the fastest of businesses to be hit and, while it’s good that there are non-repayable grants in place, the speed of which these financial packages can be accessed is again vital.

What this does not take into account for is the associated supply chain of companies have already been hit hard as providers of products or services to hospitality, retail or leisure operations.


I’m interested in your feedback and real-life experiences of the last few weeks and your view of how this will pan out. Please do get in touch or share your views. We are backing British businesses through this crisis and are doing all we can to enable SMEs to access cash they are owed within days – not weeks or months. For firms to survive they need cash in the bank now.  For advice on immediate help available:

For more information and detail of the government schemes mentioned visit:

Categories: In the News, Information