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Covid-19 opinion: the lock down doctrine is flawed as without a healthy economy there isn’t a healthy country

Covid 19 – did we really have to shut down the economy? Millions out of work, businesses destroyed and an extreme cure that’s worse than the infection. Thoughts on the greatest economic folly of our time by columnist Harry Speed.

It is heresy to suggest the Government policy to stop the spread of Covid-19 by shutting down the economy is wrong – in fact I can quite believe you can be burnt at the stake for it. The lock down evangelists have turned the nation into a country of curtain twitchers and snitchers who report to the police on their neighbours for having a back garden barbecue with close relatives. They also take to social media to promote the orthodoxy of health before the economy and demand the lock down continues, schools remain closed, sport is banned and beaches and parks are empty.

The doctrine is flawed as without a healthy economy there isn’t a healthy country. Without jobs and household incomes the nation will become bankrupt. And without work and without the right to go out and about, people go nuts. Suicides, domestic violence and the damage to mental health have a huge effect on society. With health appointments abandoned there is a ticking time bomb for the NHS. Of course it is easy to demand stringent lock downs when you are indefinitely at home on full pay, retired with a large pension or in the pay of the Government with a salary guaranteed. But in the real world and in a mixed economy people need to work.

To suggest anything else and the lock downers are ready to place the self-employed, small businesses and those simply wanting to go for a game of football in the park placed on the rack and tortured for the temerity of having a different opinion.

The reason why we have adopted the insanity of lock down and closing the economy is because we’ve followed the example of China where the Covid-19 virus emerged. The Peoples Republic of China is a one party totalitarian police state who locked up journalists and threatened medics who raised the alarm. Then when they realised the virus was killing thousands of mainly elderly people they went to the other extreme of total lock down and as a result most nations have followed their example. If the virus had emerged in New Zealand or another democratic country things would have been different. South Korea and Germany’s ruthless track and trace policy have shown how the virus should have been tackled – something that sadly the UK failed to copy.

So where do we go from here? Well we don’t go on persecuting the self-employed, retailers and the hospitality, travel and holiday industries. There is only one solution to Covid-19 and that is to live with it. In the UK lock down rules are being relaxed despite the fact there are just as many deaths from the virus now than when the lock down on March 23rd was introduced. So why relax the rules? The answer is the Government has realised it can’t go on forever as apart from a growing resistance to their measures the Dominic Cummings affair blew a hole in the policy. Suddenly it no longer seemed a crime to visit relatives or simply to go fishing. We can even go shopping – hallelujah.

What business needs now is to open up to near normal with basic hygiene and social distancing in place. Pubs, cafes, cinemas should reopen along with airlines and the holiday and travel industries. Yes there will be some restrictions but where the virus flares up then measures to lock down locally can be put in place. Many diseases have no cure or a jab and Covid-19 may never be conquered. We just have to live with it.

Harry Speed

For more on Harry Speed visit his Blogspot and Facebook sites. 

ICSM Credit

ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel – while at the moment there’s a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach – ask for details from Paul.

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk

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Ugly face of the Covid-19 crisis as theatres close leaving the suppliers with nothing

Cinderella was a hit at the Southport Theatre but with the theatre shut there’s no cash

Ian Carrotte: chase invoices owed by theatres, pubs and the night time economy in general as many will not reopen

Theatres and to an extent the night time economy in general have in a way designed to allow Covid-19 and other virus’ to be passed on.

Last week Southampton Nuffield Theatres entered administration, with Southport Theatre and the Halifax Arts Centre following suit while even Shakespeare’s Globe Theatre in London in danger of financial collapse.

No fairytale ending: Southport Theatre is set to close due to the Covid-19 recession

Writing in the theatres’ trade magazine The Stage Matthew Hemley quoted the artistic director of the Leicester Curve Theatre Nikolai Foster as saying that the Covid-19 crisis had: “catapulted our already fragile industry into a perilous and uncertain future.”

Ian Carrotte of ICSM Credit warned that theatres and other aspects of the night time economy from pubs to night clubs and music venues to cinemas should be treated with caution as far as suppliers are concerned.

“A large theatre or arts centre have a wide range of suppliers from printers to food wholesalers,” he said, “much of which was invoiced before the lock-down and theatres went dark. Many of those invoices have not been paid and if you take Nuffield Theatre Southampton of Southport as examples then it is unlikely those places will reopen. My advice is to chase up all invoices relating to the night time economy whether it’s a pub, night club, cinema or arts centre as many will be gone come the end of the furlough scheme. At the moment many will have reserves but won’t want legal action so take advantage of our temporary free membership and free legal letters and act now.”

Tight purse strings: Shakespeare’s Globe Theatre is feeling the pinch

Georgia Snow for The Stage reported: “The operator of the Southport Theatre and Convention Centre has gone bust due to the effects of coronavirus, forcing the Merseyside venue to shut indefinitely. Bliss Space (Southport) Ltd said the ‘devastating trading conditions’ wrought by Covid-19 combined with an uncertain future mean they had “no choice but to place the company into liquidation.”

To give an idea of the expanding nature of the crisis the BBC reported Shakespeare’s Globe Theatre as having major financial problems. It’s one of the most successful theatres in London but said it would need £5m to get its programme of shows back up and running. The BBC reported: “The Globe does not get annual funding from Arts Council England (ACE), meaning it can’t access ACE’s main £90m emergency relief fund. It said it was also turned down for a slice of a £50m pot for organisations outside the ACE annual funding regime. Instead, the Globe raises 95% of its revenue through ticket sales, guided tours, education workshops, retail and catering – which all depend upon the venue being open to the public.”

Southport Theatre has gone dark and may never reopen

Ian Carrotte said theatre was like virtually every sector of the night time economy as it has to pay its way without subsidy and relies on ticket sales, and its food and drink offering to pay wages and stage events.

“There will be a bloody bath of businesses if this carries on,” he said, “some pubs and venues have resorted to crowdfunding appeals pleading with their regular customers to help them pay bills in the meantime. It shows how bad things are but there is no sentiment in business. If you are owed money from a venue unless they offer a payment plan you must make sure you are paid.”

About ICSM Credit

ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel – while at the moment there’s a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach – ask for details from Paul.

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk
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U-Shape, V-Shape, L-Shape – modelling the possible outcomes of the Covid-19 recession

As the lock down is slowly eased, speculation increases about the economic effects of the Covid-19 crisis. Clearly the economy has nose-dived since March 23rd, but the question is with such a sharp decline will the country emerge quickly out of the other side of the down turn?

Writing for the finance website Filtch economist Brian Coulton believes the health crisis will be contained in the second half of the year. He said: “Our baseline forecast does not see GDP reverting to its pre-virus levels until late 2021 in the US and Europe.”

To V-Shape or not to V-Shape that is the question

The Guardian’s Larry Elliott wrote: “If history is any guide, the global economy will eventually recover from the Covid-19 pandemic, but the idea that this is going to be a V-shaped recession in the first half of 2020 followed by a recovery in the second half of the year looks absurd.”

The ideal recession is the much hyped V-shaped model which would mean things get back to pre Covid-19 levels by Christmas although as already commentated this is unlikely. Peter Hoskins of the BBC Business Desk found one example. He wrote: “A classic example of a V-shaped recession happened in America in 1953 when the booming post-World War Two economy was upended by high interest rates. After a steep decline growth was soaring again just over a year later.”

Last month the Office for Budget Responsibility (OBR) optimistically suggested that the economic recovery would take the form of the much hoped for V-shape but since then few commentators are predicting that outcome.

U-Shape if you want to

Ian Carrotte of ICSM Credit said that a more likely outcome would be the U-Shape recession with a long period where the economy  ‘bumps along the bottom.’ He said: “The classic U-Shape was the US economy in the 1970s and the British ones at the beginning of the 1980s and end of the 1980s. The economy went in  quickly to a downturn and it was a good couple of years before things picked up.”

Nouriel Roubini is professor of economics at New York University’s Stern School of Business who worked for the International Monetary Fund, the US Federal Reserve, and the World Bank is in general agreement. He said: “After the 2007-09 financial crisis, the imbalances and risks pervading the global economy were exacerbated by policy mistakes. So, rather than address the structural problems that the financial collapse and ensuing recession revealed, governments mostly kicked the can down the road, creating major downside risks that made another crisis inevitable. And now that it has arrived, the risks are growing even more acute. Unfortunately, even if the Greater Recession leads to a lacklustre U-shaped recovery this year, an L-shaped great depression will follow late.”

Nightmare of the L-shaped room

If the Credit Crunch of 2008 was U-Shaped and the 1953 recession in the US was V-shaped then it is difficult not to admit the prolonged depression of 1929-1939 was anything other than L-shaped. Only the mass production and full employment brought about by the build up to World War Two changed gears in the economy. An L-shape recession is a possibility in 2020 for several reasons. It’s global, there may not be a vaccination, huge numbers of businesses have gone bust, traditional sectors like retail, travel and hospitality have been mortally wounded and unemployment has increased.

“There is a recession coming,” said Ian Carrotte, “but strangely enough Covid-19 will come to the rescue of many firms. Any business that collapses when the furlough scheme ends can blame it on the virus, while many firms that have a successful business model but no money could phoenix and start again. It might even become socially acceptable to do that as so many businesses are in the same situation.”

Having experienced four recessions Ian Carrotte said each one is different and nobody knows how this one will pan out. “Inflation remains low, internet business has rescued many firms, and oil prices are low keeping transport costs down,” he said. “Looking back to the past it is not possible to find a parallel. Not even the flu epidemic of 1918. Then people knew the flu spread in large gatherings but they simply got on with life. Perhaps that is something we will have to do in the end as social distancing is like a handbrake on many aspects of business.”

ICSM Credit

ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel – while at the moment there’s a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach – ask for details from Paul.

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk
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The paradox of fewer administrations but more companies on the brink of collapse

KPMG: fewer administrations than 2019 – but expect more than 100,000 corporate insolvencies this year

In a surprising study by KPMG the number of firms entering administration in the first week of April this year was less than the same period last year with the same reduction in failures compared to March 2019. The Bank of England predicts the economy will see a 14% retraction this year with a slump taking place as the economy gets back to normal this autumn.

Don’t take no for an answer

“There is evidence that the furlough scheme is preventing firms from collapsing,” said Ian Carrotte of ICSM Credit, “while there has been the phenomenon of zombie companies which stagger on from one year to another until the banks call in a loan, they have one bad debt or something like this crisis causes the firm to go bust. They are on borrowed time on the furlough scheme but they’re not earning anything so as soon as the safety net is pulled they’ll go under. My advice to ICSM members and anyone in business is if a firm says they will pay your invoice when the furlough scheme ends don’t believe them. They won’t have any more cash this summer and their priority will be survival. Don’t except no for an answer and press them for payment and use our free legal letters to chase them or use our debt collection service as the courts are open.”

Pic: the Irish Times

Oasis Ireland have gone into administration this week and so have women’s fashion brand Autonom. In the Midlands the motor outfit Arlington Automotive Group who make parts for Ford, Jaguar Land Rover and Nissan have also called in administrators. Car sales have collapsed to pre-1950 levels this spring and retailers like Oasis have been struggling for some time. Picsolve International (the photography company) have also called in administrators as the leisure and events industry has collapsed while in Scotland where the lock down remains strict the construction industry has seen the contractor Neil McGougan call it a day.

Worse than 2008

Writing for Accountancy Age Tom Lemmon reported: “The coronavirus crisis is likely to directly force between 70,000 and 100,000 companies into insolvency, according to Gareth Harris, partner at RSM Restructuring Advisory, while R3, the trade body, suggests that figure could grow substantially over a longer period of time.”

The Bank of England

Ian Carrotte noted that the credit crunch of 2008 created 114,000 corporate insolvencies. He said: “I’ve seen figures likening this downturn to the 1930s but this is a different economy from then. There were still firms making carts for horse drawn vehicles, whale born corsets and hats. However the economy is much larger now and interconnected internationally so this recession could top the effects of 2008 by a long way.”

Two spikes of insolvencies

It is a view shared by Duncan Swift, the president of insolvency trade body R3 who feels the number of corporate insolvencies could be several times higher than 100,000. He said: “In the 2008 financial crisis there were 114,000 corporate insolvencies. Now that was as bad a recession as we’ve had in living memory since the 1930s and it was 114,000. Which is why the 800,000 just needs a bit of context putting around it. 800,000 would be a phenomenal number.”

He said there could be two spikes during the crisis with one at the end of the lock down and one further away as firms who survive initially but then fail in the following months.

ICSM Credit

ICSM Credit had more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel – while at the moment there’s a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach – ask for details from Paul.

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk

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ICSM Credit Latest News: high risk credit ratings for firms listed plus Hotel Chocolat in trouble and the taxman is after firms abusing the furlough scheme

ICSM Credit Latest News: high risk credit ratings published – includes a house builder and a school; Hotel Chocolat’s problems, Next in trouble and the taxman is after firms abusing the furlough scheme

The latest news from Companies House shows several firms have had their credit ratings moved to high risk and a credit limit of zero as the present Covid-19 crisis continues.

Bowbridge Homes (Site E) Limited, Motive Agency Limited, Martins Waste Clearance, Rope Access Man Power UK Limited have all suffered the indignity of a zero rating while the privately owner Park School in Somerset currently in administration is also placed in the high risk category. Opened in 1851 the school moved out of the centre of Yeovil in 2018 in a bid to attract more pupils at a larger site but has struggled ever since. The Covid-19 outbreak has meant a drop in parents signing up their children for the new term plunging the enterprise into administration with Grant Thornton charged with finding a buyer.

Chocolate problem

Meanwhile on the High Street John Lewis has announced they may not reopen all their stores after lock down and Next has seen a 52% fall in sales in the year up to April 25. Another casualty – this time of the lucrative Easter egg market – is Hotel Chocolat who were forced to close their stores for the industry’s second biggest season of the year. However they did get a sales spike just before the closure and are concentrating on online sales but have had to alter their bank lending facility as a result reported Elena Cherubini in The Grocer.

The taxman cometh

ICSM Credit understands from its sources that HMRC are pursuing several big name firms for forcing furloughed staff to work in direct contravention of the rules – which if proved could lead to massive fines. The Guardian reported this week that Sports Direct and House of Fraser have allegedly breached the rules by sending managers into work and asking them not to clock on. Don’t forget the taxman doesn’t stop working during the lock down.

Logistic issue

Despite the boom in logistics there has been another casualty in the industry with Carters Haulage in Hertfordshire entering administration. Chris Tindall writing in Motor Transport said the firm had expanded from one lorry to 40 in just three years to service a blue chip client and then lost the business months later. He reported: “In a report to creditors, administrators at SFP also said it was now investigating ‘certain transactions’ prior to their appointment and that it may be advisable for the business to remain in administration for the time being.”

ICSM Credit

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk
 ReturnPosted by Harry Mottram on 4th May 2020 12:21:48Tel 0844 854 1850 ___ Fax 01454 327 355Privacy Policy   © ICSM 2020 All Rights Reserved

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Print, paper and office industries stunned by Spicers notice to appoint administrators

Disaster for suppliers and staff of Spicers Office Team as firm looks set for administration as the Covid-19 crisis strikes again

Last week ICSM Credit issued a warning to all its members that Spicers Office Team known as SPOT were in danger of collapsing and urged its associates to chase down overdue invoices with the outfit.

There has been shock this week as the warning appears to have come true as the firm has filed a notice of intention to appoint administrators.

Writing in the trade journal Print Week Jo Francis reported: “The notice of intention to appoint administrators is for both Spicers and Office Team. Office Team is a nationwide distributor of stationery and office supplies, and its business services include print management. Spicers supplies and distributes office products and office furniture.”

Ian Carrotte of ICSM Credit said it was the worst possible news as the list of suppliers in danger of not getting paid was ‘horrendous.’ He said: “We flagged this up last month as a problem and advised members to stock granting credit to Spicers and insist on immediate payment of overdue invoices. Some have made progress on that front using our free legal letters and debt collection service but if Spicers goes then it will be on the same level as North Star when they went to the wall.”

Jo Francis quoted SPOT’s chief executive Steve Horne as saying: ““The board continue to explore all options to ensure a satisfactory future for the business and secure as many jobs as possible. Whilst we continue to look for solutions, we are committed to support and supply our customers,” Horne stated.

“During this period we remain open for business and will continue to supply our customers with any products we have in stock. Where there is an impact on our supply chain and we cannot guarantee the supply of goods, we will continue to be proactive and help our customers source these products by providing details of our suppliers, where the order could be completed directly with them in the short term.”

Jo Francis said: “SPOT had sales of £281m in its most recent accounts, for 2018. Restructuring and other costs resulted in a near-£26m operating loss. The business had around 1,440 employees at the time. This morning (29 April) SPOT’s owner Better Capital announced that it planned to hold an extraordinary general meeting (EGM) and was proposing to cancel its listing on the London Stock Exchange. Its two funds were due to run until June 2021, but the Covid-19 situation has adversely affected its investments.”

ICSM Credit

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk
 ReturnPosted by Harry Mottram on 30th Apr 2020 11:18:22Tel 0844 854 1850 ___ Fax 01454 327 355Privacy Policy   © ICSM 2020 All Rights Reserved

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AGENDA WEST Business News from the Association of Independent Professionals and the Self-Employed on why many new mums and over 60s workers won’t get the Government’s financial support during the covid-19 crisis

IPSE research: over-60s and new mothers among groups most likely to miss out on government self-employed support

Over-60s, 50-59-year-olds and new mothers are three of the groups most likely to miss out on government self-employed support because they went into freelancing too recently, according to new research by IPSE (the Association of Independent Professionals and the Self-Employed).

The research shows that there were 83,000 more self-employed people aged 60 or over last year out of a total 156,000 rise in the number of self-employed people. This was an increase of 11 per cent on the previous year. There were also 38,000 more 50-59-year-olds (an increase of 3%) and 22,000 more 16-29-year-olds (an increase of 4%). There were also 25,000 more self-employed mothers (a 4% increase on the previous year).

The Self-Employment Income Support Scheme, introduced last month to provide income support to self-employed people during the Coronavirus crisis, is unlikely to help most of these people because it is only open to self-employed people who filed a tax return for the year 2018-19.

IPSE’s research also found that occupationally, between 2018 and 2019, the largest increases in self-employed people were in teaching and education (34,000), artistic, literary and media occupations (16,000) and legal professions (16,000). At 24 per cent, the increase in the number of teaching and education professionals was particularly sharp.

Despite these increases, however, the research showed that the top solo self-employed professions are still construction and building trades (444,000), road transport drivers (337,000), artistic, literary and media occupations (336,000) and agricultural and related trades (222,000).

Across the UK, the highest increases in self-employed people were in South East England (77,000), North West England (38,000), North East England (27,000) and Scotland (26,000). Overall, however, the self-employed community is most concentrated in the South East (21%), Greater London (18%) and the South West (10%).

Chloé Jepps, Head of Research at IPSE (the Association of Independent Professionals and the Self-Employed), said: “This research, looking at the year-on-year increase in the number of self-employed, suggests the groups that were growing most quickly last year and are therefore most likely to miss out on support now.

“The groups most at risk of being left out in the cold seem to be not only older freelancers, but also mothers – who are if anything more likely to be in need of support.

“In 2019, more and more people were going into self-employment for the freedom and flexibility this way of working provides – the freedom to fit your work around your life rather than the other way round. Now, however, these people’s incomes are drying up and, because of a flaw in the government’s support scheme, most are not getting the help they need to keep their businesses afloat.

“The government must get the newly self-employed – as well as limited company contractors and others who are missing out – the help and support they need. We urge the government to extend the Self-Employment Income Support Scheme to people who became self-employed in 2019/20 – and use this year’s tax returns to get them the financial assistance they need.

“The self-employed are the dynamo of the UK economy – they contributed £305bn last year alone – and we will be looking to them to get the economy back on its feet in the coming months. But to do that, all parts of the varied and diverse self-employed community urgently need support now.”

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk

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AGENDA WEST Business News from ICSM Credit: After the coronavirus lock down: a look into one firm’s crystal ball

It is not official but little by little many businesses are beginning to reopen in a limited way writes Harry Mottram for ICSM Credit. Traffic has picked up on the motorways and some firms who thought they were non-essential enterprises have found a way round the dictates from central Government. B&Q have reopened 64 stores including their garden centres while Halfords have reopend the majority of their 460 stores.

Pharmacies, petrol stations, newsagents, bicycle shops, home and hardware stores, launderettes and dry cleaners, garages, pet shops, post offices and banks have remained for the large part open although not all businesses in these sectors have kept their doors open. Supermarkets and corner stores have remained open and parts of the building trade have maintained operations despite criticism.

Various dates have been mooted in the media as to when the lock down will be lifted with the received wisdom being it will be a gradual reopening with schools and garden centres first and pubs and restaurants last. The question is what state will business be in when it happens? Here are a few scenarios:

Early lift-off in May

With the outbreak under control and the depressing death and infection statistics falling to near zero the economy is restarted with a general back to work. Huge demands from consumers for almost all types of products sparks a massive sigh of relief from all and as a result the smallest number of firms going into administration. High Street stores such as Debenhams and Zara reopen and find cash flow streaming back to Christmas levels. Struggling printing companies, sign makers suddenly have an order book of work that guarantees business for the rest of 2020. Despite banks being difficult during the lock down and insisting on commercial loans with high interest rates finance directors realise their revised cash flow forecasts mean they will be back in the black by the autumn and can give their lenders two fingers. All highly unlikely but we live in hope that we might escape the worst.

Trickle back in June

June 1st has been suggested by some in the teaching profession as the earliest date the schools can start to return to normal. Staggered numbers of pupils are allowed back with priority to primary and infant schools – which of course allows the parents of the children to return to work and nurseries and childminders to reopen. At the same time clothing stores, leisure centres for outdoor sports, furnishing and furniture stores, barbers and hairdressers open with some social distancing measures in place. By June with insurers pulling cover on invoicing for firms due to there being a pandemic scores of printing firms, hauliers, manufacturers and engineering companies will find they are insolvent. Large numbers of firms call in the administrators and personal bankruptcies rocket. Don’t expect a U-shape recession.

Too late in July

If there remains a total lock down until July some firms will break ranks and vote with their feet and return to work despite the law. But up to 50% of retailers, 40% of service industry firms and 30% of manufacturers will have gone bust. Commentators have looked to the past to see how damaging a recession that would result with a late return to normal working. The Credit Crunch was bad as were the recessions of the 1980s but such a delay could be more like a depression. Later than July and we’re talking wipe-out for the pub and restaurant trades. Cinemas, night clubs, arts centres, holiday parks and tourist sites will see mass casualties especially if the lock down is reintroduced as a second wave of coronavirus sweeps the country in the autumn. Let’s hope there’s a jab available by then.

After coronavirus

These are the personal thoughts of the journalist Harry Mottram so don’t take them to heart but at present it’s hard to see light at the end of the tunnel. What is certain is there will be a major restructuring of business with some sectors unlikely to recover to pre lock down levels. Those who relied on the insurance companies to bail them out as their clients went bust or refused to pay will be disappointed. And those factoring their invoices likewise will have seen this model of payment founder on the coronavirus rocks.

Newspapers have taken a further knock to their circulations with publishers increasingly putting up paywalls on their news websites to up the income. Newsquest has announced all its titles will be monetised this way as a result of coronavirus as the print product continues its decline while 20 weekly papers have suspended publication for the duration of the crisis – whether they reopen is open to question. However with time on their hands the publice have taken to reading books with an increase in sales with fantasy and educational literature doing particularly well.

With pubs and restaurants likely to be the last to reopen sadly the British public have got used to entertaining at home meaning many establishments will have died. The dark kitchen industry is one success story with meals delivered to householders a cheaper alternative to dining out, and deliveries in particular from Amazon but increasingly retail stores who have switched to online like Cath Kidston are increasingly the future.

Home working has become the norm for many firms so expect some companies to cut their losses and give notice to expensive rented suites in fashionable locations with a smaller hub and the staff working from home. Together with retailers deserting the high street there could be a book in converting more redundant offices and shops to flats and apartments. More work for builders, fitters and associated trades along with sign-makers and estate agents.

Firms specialising in working out why people buy certain things online and from particulare websites are on the increase along with one slightly unexpected business growth: in second hand cars. Not the traditional site by the main road with rows of ex-company cars for sale but an online service where you key in the specifications you want and the car is brought to your door for you to take delivery. Cazoo raised £100m last week to expand its operation. Arthur Daley eat your heart out.

They say every economic downturn has an upside. New business models emerge as older industries die off. But the good news is if your business comes out of this pandemic intact and profitable then you have a bright future as competition will be less and prices will be higher.

ICSM Credit

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk

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The Business Survivor’s Guide to the coronavirus crisis

How to get your business through the Covid-19 crisis

Helen Thomas on BBC1’s Newsnight programme interviewed a number of businesses including hairdressing salon owner Robert Eaton from Barnsley who said he expected a surge of business when the lock down ended. Longer hours and a seven day week were options he said, but for many in business the end of the lock down could see a much lower level of business than before March 23rd when the nightmare began. 

The Government’s help for businesses has been criticised for generally helping larger and long established companies rather than start-ups, freelancers and one man outfits. There is help for many and so they are worth checking out although don’t hold your breath that it is a panacea to your financial problems.

Away from what’s on offer from the Chancellor Rishi Sunak businesses have been telling ICSM credit some of the provisions they’ve put into practice.

Hibernation

If you have an industrial unit and orders literally stopped on March 24th, many firms completed any outstanding work in March, furloughed the staff and then sent everyone home, closed the doors, switched off the electricity and redirect links to the owner’s home on their phones and work emails. Of course not all businesses have been able to furlough staff so many simply laid their staff off. Not a pleasant thing to do but together with closing the business it meant overheads were slashed.

With just a handful or fewer members of staff working from home overdue accounts can be chased up, long forgotten paperwork addressed and customer data updated. It is a chance to do all those tasks that never get done.

Chase overdue invoices (with free help fromICSM Credit)

Some firms have publically announced they will not pay any invoices until they can reopen. However their protestations are not always what they seem. All will be paying some invoices so make sure you chase down those outstanding invoices however old they are and whatever the excuses given for non-payment. ICSM Credit has a free temporary membership with free legal letters which can be downloaded and sent online to debtors – and the letters are bringing in large amounts of cash during to crisis. Despite the lock down the courts are open so if clients won’t pay up or refuse to negotiate a payment plan then ICSM Credit’s debt collection department is highly effective with most overdue monies paid before court action takes place. Remember, the louder you shout the more likely you will get paid.

Skeleton operation

If orders are still coming in albeit at a fraction of previous levels then some firms are processing them with just a couple or so staff doing all the tasks themselves. From answering the phones to boxing up and dispatching orders it means the business ticks over while everyone else is dismissed, furloughed or working from home. Some members of ICSM Credit said they’ve shut down some of their offices and outlying buildings in order to save on overheads but are officially open.

Shorter working hours

Some firms have not furloughed staff but rather put them on short term working or fewer hours. Most contracts will have a clause allowing for this – especially for businesses affected by seasonal fluctuations. For smaller businesses that can keep ticking over such as take-aways, couriers and groceries this is an option and is a model for survival as the enterprise is only compromised to an extent.

Voluntary liquidation

There’s evidence that some businesses have made the decision to cease trading due to the crisis either bringing forward a planned members voluntary liquidation to wind up the enterprise or because the owner sees no future after the lock down. It is the route taken by a lot of companies going by the numbers listed every day at Companies House. If you can pay off all your debts, sell off the assets, complete your accounts and apply to Companies House to be struck off then there’s no reason why you can’t retire or start a different venture in the future. What you can’t do is cynically wind up the company, transfer all the assets into a new but identical business, dump the debt by declaring insolvency and do a phoenix when the lock down ends. You could face charges of fraud if you do.

Staff work from home

Lots of firms who operate from offices and whose only assets are lap tops and mobile phones this is an attractive option as if work flow continues as normal then there will be little difference. If the offices are rented on short term contracts then if you hand in your notice to the landlord now then apart from the saving you may get a much lower rent when things get back to normal apart from savings on coffee, milk, electricity and toner cartridges.

One aspect of home working is to double check you have insurance cover for staff working in their own homes. And then there are company laptops, phones, or are they are using their own? And if there’s an IT problem how to do resolve it (apart from switching your computer off and on) when your IT department maybe in lock down as well.

You working from home

If you have children or are living in a shared house with lots of family members, pets or lodgers then it can be a problem without a separate office or spare room. The daily distractions can interrupt the work flow although there’s no commuting which frees up more time for work or to be with the family. One issue is whether your internet is up to the job of conducting online meetings via Zoom and other apps.

Re-evaluate

Whatever the state of your business, with the current lock down take the chance to re-evaluate your business model. Do you still have a focus or has the economic situation changed your world? Are there areas which are profitable which you don’t exploit enough? How profitable are some of your customers and would it make sense to drop some of them if they consume too much time and resources? Go through your accounts and identify items that you don’t need to make a saving. Is that extra company car required – or that company gym membership worth it? And do you have too much stock? Treat the down time as an opportunity to sort out long held concerns which you can now address so that you are ready when the lock down ends.

Pre-selling for cash up front

Some businesses are offering discounts for future work for upfront payments during the crisis. Pre-selling is essentially asking your regular customers to help support your business during the crisis and it can work in some cases.

Diversification

Some businesses have re-invented themselves during the crisis by using what they already have. Pubs and restaurants have rebranded themselves as take-aways, cafes and eateries have turned themselves into grocery stores while manufacturers have switched to producing PPE for the NHS. If you have a fleet of vans used for instance to deliver print then there’s no reason to market yourself as a courier company. With a little imagination diversification is an option which could see you through the crisis.

Government help: Banks and Coronavirus Business Interruption Loans

The temporary Coronavirus Business Interruption Loan Scheme (CBIL) is aimed to give businesses access to bank loans. The government provides lenders with a guarantee of 80% on each loan but the borrower remains 100% liable for the debt. CBILS is operated by the British Business Bank and associated lenders. However feedback so far shows that many banks try to push applicants towards high interest loans claiming they are too risky and have been known to ask for security such as property. Plus there’s a back log so don’t expect an instant answer. The main problem businesses have found is the viability criteria with banks able to refuse businesses which are clearly viable. Hence the low take up so far.

Government help: Sick pay

Small and medium-sized businesses can reclaim a refund on Statutory Sick Pay (SSP) for employees affected by coronavirus. The government said it ‘will work with employers over the coming months to set up the repayment mechanism for employers as soon as possible’. It covers up to two weeks’ SSP per employee who has been off work because of the virus and is for employers of less than 250 workers.

Government help: Furloughing

All UK employers will be able to access grants to cover some of their employees’ salary for those employees that would otherwise have been laid off through furloughing. HM Revenue & Customs’ (HMRC) will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. Again to furlough staff requires employers to jump through several hoops

Government help: Benefits for the self-employed

To qualify for Universal Credit the self-employed with trading profits of up to £50,000 a year can get up to £2,500 a month to help cover coronavirus losses. They must have submitted their self-assessment tax return for the tax year 2018 to 2019, to have traded in the tax year 2019 to 2020 and intend to continue to trade in the tax year 2020 to 2021. You must also show you have lost trading profits due to coronavirus. But don’t hold your breath as payments are unlikely to be made until June at the earliest.

Government help: Business rates relief

To help High Street businesses in England, all retail, leisure and hospitality business will have no business rates in 2020-21. Contact your local council or unitary authority for details.

Government help: Grants for business rates paying businesses

The government offers a £10,000 grant to retail, leisure and hospitality businesses with a rateable value under £15,000. Retail, leisure and hospitality businesses with a rateable value between £15,001 and £51,000 can access a £25,000 grant. Again feedback from ICSM Credit members suggests there is a lot of form filling involved and long delays before any confirmation.

ICSM Credit

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk

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Latest company collapses: Virgin Australia, Le Pain Quotidian and Debenhams Ireland (but Norton Motorcycles have been rescued)

When Richard Branson pleaded with the British Government this week for a £500m loan to bail out Virgin Atlantic he was roundly slammed as a millionaire pleading poverty.

Whatever the rights and wrongs of his case, it shows how the coronavirus crisis can bring down even the most high profile successful companies. Let alone the one man printing outfit or the self-employed taxi driver. Virgin Atlantic could follow the likes of Flybe and Virgin Australia into administration while Norwegian Air is on the brink after four subsidiaries filed for bankruptcy this weekend.

Ian Carrotte of ICSM Credit said the numbers of firms going to the wall were at levels he hadn’t seen in 40 years in business. He said: “Everyone has heard of the Carluccio’s and Laura Ashleys of this world but there are scores of lesser known printers, sign-makers, pubs, hotels and retailers going bust every day. The Government’s rescue packages have benefitted some but the feedback ICSM Credit gets is there’s a large number of SMEs who fail to qualify for loans on ‘viability’ grounds. It is physically impossible to carry out the amount of rescues that Rishi Sunak has promised in such a short time. In the meantime it’s every man for himself.”

Virgin Australia has gone bust this week while the Belgium café chain Le Pain Quotidian with dozens of outlets in the UK has called in the administrators. Debenhams staggers from one crisis to another but the owners have liquidated the Irish branch of the department store while closing more outlets in England.

Today’s page of Companies House shows yet more firms in administration

“Every one of these companies,” said Ian Carrotte, “owe huge amounts of cash to their suppliers. We’ve seen from the likes of Jamie Oliver’s Italian the list of creditors is long. From the window cleaner to the paper merchant, there are thousands of businesses left with unpaid invoices due to firms finding it simpler to enter administration. Yes it is good that some manage to trade their way out of administration or find a buyer like Norton Motorcycles have but these are often a chance to dump the debts and phoenix.”

On just one day last week around 150 companies ceased trading or were wound up according to Companies House. Ian Carrotte said nobody can be immune to what is happening which is why firms that have outstanding unpaid invoices should contact ICSM Credit to get free help in tracking down their debtors and getting paid before it is too late.

Norton Motorcycles created by James Lansdowne Norton in Birmingham in 1898 has been bought out of administration for £16m cash by TVS Motor Company in India. Finally some good news to end on.

ICSM Credit

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk
 ReturnPosted by Harry Mottram on 20th Apr 2020 15:15:30Tel 0844 854 1850 ___ Fax 01454 327 355Privacy Policy   © ICSM 2020 All Rights Reserved

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AGENDA WEST BUSINESS NEWS: What a joke: ‘I tried to get a Coronavirus Business Interruption Loan’

By April 14, only 6,020 of the Government’s Coronavirus Business Interruption Loans had been granted out of more than 300,000 applications.

“The system is not coping,” said Ian Carrotte of ICSM Credit. “As an exercise I applied for one with Nat West and plucked the figure of £20,000 out of the air as I don’t need one. I went online and completed the details for the interest free 12 month loan with a £150 completion fee at the end. All fine so far but that was two weeks ago. I’ve chased it up and so far there’s no communication, no paperwork sent and nothing to sign. It’s a joke. Businesses need cash fast as many are teetering on the brink of collapse.”

His experience is reflected across all industries and across all parts of the country as CEOs and finance directors bang their heads against a brick wall in frustration at the delays. David Price writing in Construction News said he has spoken at length to firms from across the industry’s supply chain. He reported: “The average contractor has enough cash to last around six to eight weeks while projects are stopped. Beyond that, the viability of businesses is seriously in doubt. Help in the form of £330bn-worth of government-backed financing promised by chancellor Rishi Sunak in the middle of March is not flowing fast enough. Contractors big and small are being thwarted by a mix of banks’ inability to process the tsunami of applications and lenders unwilling to lend. The industry has just weeks to somehow get the cash flowing again. But how that happens in an economy paralysed by the coronavirus pandemic is worryingly unclear.”

One million in trouble

Everywhere you look it is the same story. Andy Verity of the BBC reported last week: “Nearly a fifth of all small and medium-sized businesses in the UK are unlikely to get the cash they need to survive the next four weeks, in spite of unprecedented government support. That’s according to research from a network of accountants which suggests between 800,000 and a million firms nationwide may soon have to close. Many firms have told the BBC that banks have refused them emergency loans.”

Meanwhile Ian Carrotte is still waiting for an answer and details of the loan he applied for despite not needing it. He said: “Members of ICSM Credit have told us that it’s one thing to apply and another one to actually get the cash in your account to pay overheads and wages. I accept these are unusual times but when the chancellor set up the loans and grants scheme as a former banker he would have known the system would not cope. Businesses must chase up money owed to them as that is their best form of cash flow.”

That idea has been taken up by scores of ICSM Credit members who have either used the credit group’s free legal letters or their debt collection service headed by Paul Carrotte. He said that contrary to popular opinion firms are paying invoices once the right sort of pressure is applied.

“We’ve had a lot of success for clients during the coronavirus crisis so far,” he said, “debtors are generally willing to pay smaller invoices less than £10,000 as despite everything they do have some cash available. Nobody I’ve spoken to has been able to access one of the government bank loans so getting paid for work you’ve done is the best way to keep afloat.”

Courts are open

Banks and insurance companies he said have been telling customers that the courts and legal systems are closed which is untrue.

“Generally business is continuing albeit at a reduced level,” he continued, “with most firms willing to pay invoices but when it comes to large debts I say to clients you need to be open to payment plans. Debtors will nearly always agree to these but it comes down to negotiation. Payment plans can have reviews built into them every so many weeks so that if things pick up the payments can increase and it is always better to have some cash coming in as well as keeping a business relationship intact.”

ICSM Credit

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk

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AGENDA WEST BUSINESS NEWS: Covid 19: Frustration, delays and disappointment as firms denied emergency funding

Business groups say banks are too slow in processing emergency loans during crisis

The British Chamber of Commerce have urged the Government to speed up the way finance is being processed through the banks for businesses trying to cope with the coronavirus crisis.

Hannah Essex of the Chamber said: ““Despite swift and unprecedented support from the government, many firms continue to face a cliff-edge scenario. Cashflow remains a particularly urgent concern for many businesses. The BCC’s Coronavirus Impact Tracker data suggests just over a third of firms have only three months cash in reserve or less.”

The Coronavirus Business Interruption Loan Scheme

The Coronavirus Business Interruption Loan Scheme (CBILS) has been widely criticised as has the furlough scheme with two thirds of Chamber members still awaiting promised funds as payday approaches. Despite the huge amount of funds made available to the banks to loan businesses the Chamber found only 2% had so far been successful with only 15% having managed to secure a grant for small businesses. The firms who said they were unsuccessful said they were told they did not meet the criteria while those who applied for a CBIL and were denied said they were told their business was not viable.

One in ten small firms are planning to close leaving millions out of work this summer as the effects of the crisis become clear. At the start of the crisis last month Rishi Sunak announced the Treasury scheme intended to help small businesses mitigate the impact of the lockdown with emergency loans but this week UK Finance admitted only 28,460 firms have been allowed to formally apply despite 300,000 inquiries with £1.1bn paid out from the headline figure of £30bn package of loans, grants and other financial measures available.

German, France and Spain

On the Continent France has helped 150,000 firms with £19.2bn, while Spanish banks have issued £4.1bn of state-backed loans to 48,542 companies and Germany has overseen 9,368 loans to businesses totalling £4billion. The Berlin Government said all requests for £2.6m or less are approved instantly, while those up to £8.7m are fast-tracked in less than a week.

Federation of Small Businesses national chairman Mike Cherry said: “Many members tell us it’s difficult to get to the formal application stage and banks are still slow to respond.”

Ian Carrotte

Thousands of businesses have given the media examples of how they have been turned down either for a loan or a grant. The various stories led Ian Carrotte of ICSM Credit to carry out an experiment and apply for a CBILS himself as an academic exercise as the business doesn’t need one. Although the application with one bank was successful the bank requested his home as security. A second bank refused the application on the grounds of viability.

“Banks are behaving in a cynical way,” he said, “because when a firm applies for one of these loans they push them towards a normal commercial loan with interest rates of nearly 20%.”

He said almost all firms have credit with their debtors and they need to use the down time to chase up their overdue invoices. ICSM Credit he said has a system of free online legal letters which members are using to bring in cash which is theirs.

“Free legal letters are still highly effective,” he said, “they secure a success rate of 87% even during this crisis and for the few that don’t work our debt collection service is available. The legal route continues unaffected by the lock down so don’t sit and wait for July – act now.”

ICSM Credit

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk

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AGENDA WEST BUSINESS NEWS: Concerns mount over winding-up petitions during coronavirus crisis

Picture ITV

Call to delay winding-up petitions as companies crash during coronavirus crisis

Retailers Warehouse and Oasis are the latest big names to enter administration as the lock down continues to cause huge falls in retail sales.

And with no end in sight retailers and many other sectors are finding banks and lenders are calling in their loans while landlords are refusing to allow them a rent holiday. The result is a rise in the numbers calling it a day and shutting up shop for good as creditors apply for winding up petitions in the belief their clients are insolvent.

London law firm RPS has called for a temporary halt to winding-up petitions to give businesses a breathing space. Drapers online have reported that already there has been 52 petitions to wind-up retailers in the capital during the crisis.

Grace Whelan for the publication reported this week: “RPC is now calling for a moratorium on these petitions. The move would give retailers ‘a much-needed buffer to help them stretch payment deadlines’ as they seek to mitigate the impact of coronavirus. However, it would also be dangerous for creditors, including suppliers, who could be left even further out of pocket. 

Finella Fogarty of RPC, said: “Even if the winding-up petitions aren’t processed, they scare off [other] suppliers and possible funders and can have damaging effects on businesses.”

Ian Carrotte of ICSM Credit said there was a problem of suppliers being left high and dry when a firm entered administration. He said: “If like Debenhams at the moment the company can continue to trade during administration then some suppliers will be able to recover some of their losses. The worst case is a company simply being liquidated immediately. Companies can and do trade their way back into solvency during administration. During this lock down period there needs to be flexibility as many companies have moth-balled themselves until June or July but they must still keep paying suppliers or communicating with them and paying something to retain their relationship.”

ICSM Credit

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk

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Printing presses fall silent as industry is hit by the Covid 19 shut down

A trade body representing the UK print industry has published the results of its survey of members during the first days of the coronavirus crisis and its effect on business.

The results are shocking with 74% of respondents reporting a ‘considerable downturn’ while the average number of orders was down 65% in the British Printing Industries Federation (BPIF) report.

BPIF chief executive Charles Jarrold said : “It is bleak and it reflects the fact that the economy has been shut down and the sectors that have been instructed to close represent a significant part of the [print] client base.”

Charles Jarrold

Reporting for the trade magazine Print Week Jo Francis wrote: “Some parts of the printing industry, such as food and pharma packaging and those supplying the NHS and public services, remain as busy or busier than usual. But the government-mandated shutdown of general retailers, pubs, restaurants, leisure facilities and the property market has had a huge impact on printers. A staggering 74% of respondents to the survey reported a ‘considerable downturn’ in order levels, while the average change in order levels from the usual monthly level was down 65%. One print boss told Printweek that his company’s sales were currently running at just 15% of normal levels.”

The BPIF said the respondents represented sales of £3.1bn and more than 22,000 employees took part. The survey was carried out jointly with stationery and office supplies federation Boss, and ran from 23 March to 6 April.

Ian Carrotte

Ian Carrotte of ICSM Credit said the group had many members involved in the printing industry and the survey accurately reflected the feedback he had received. He said: “The industry has been contracting for several years with several big names only just surviving so this crisis is set to damage printers along with many of their customers. Less than 10% of firms who have applied for the Government’s Coronavirus Interruption loans have been successful with the banks turning away perfectly sound businesses. What the printing industry needs is more targeted help and lots of Government coronavirus information campaigns using print rather than social media as there are thousands of jobs at risk.”

The BPIF Summary

Over one-third (36%) of respondents have experienced considerable disruption to their supply chain as a result of Coronavirus.

40% are confident (‘very’ or ‘somewhat’) that supply chains will be maintained. However, comments allude that supply chain security is more at risk as staff shortages increase and a dichotomy between firms remaining operational and others shutting down stresses supply chains.

Nearly three-quarters (74%) or respondents have reported a ‘considerable downturn’ in order levels. The average change in order levels, from the expected monthly level, was -65%.

40% of firms are ‘extremely concerned’ about the short-term* survival of their clients’ businesses (*next three months).

On average 27% of responding firms’ business is supporting critical services (in the food, pharmaceutical, health & social care, education, public services and local government sectors).

Just over one-third of respondents (34%) are ‘extremely concerned’ about the short-term survival of their own business. Slightly more, 38% are ‘extremely concerned’ about long-term* survival (*beyond six months).

Nearly one-quarter (23%) have reported a significant increase in bad debt exposure. Furthermore, 71% have experienced debtors withholding payment due to the uncertainty.

Over three-quarters (77%) require some degree of emergency assistance to maintain cashflow, cover costs and survive – 38% stated that they require this assistance either ‘immediately’ or ‘in the next week or two’.

Over one-quarter (27%) have already made redundancies – for these companies the level of redundancies averaged at 41% of the workforce.

Further redundancies are expected (18% ‘definitely’, 22% ‘probably’ and 29% ‘maybe’) in the short-term. The average expected level of redundancies is 37% of the workforce.

A majority of companies have implemented Covid-19 prevention measures, the most common being social distancing (91%), working from home (86%), banning visitors (74%), banning off-site meetings (69%) and banning business travel (65%).

Regarding ratings of the Government’s response – the extensiveness and timeliness of the Government’s support measures have received positive ratings, on balance. However, access to this support has received a negative rating. 15% selecting ‘very poor’ and 26% ‘poor’ clearly outweighs the 20% selecting ‘good’ and 2% ‘very good’.

The most commonly suggested additional support from Government is extended grant support and business rates relief (78%) and a deferment of VAT, PAYE and NIC payments (77%).

ICSM Credit

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk

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AGENDA WEST Business News: Coronavirus kills off the Jewish Chronicle newspaper founded in 1841 as the print industry takes a massive hit from the crisis

With a declining circulation and restrictions on distribution and sales due to the coronavirus outbreak one of the oldest print titles in the UK is set to fold.

In a statement on its website the Jewish Chronicle’s editor Richard Ferrer announced: “With great sadness, the Board of the Jewish Chronicle has taken the decision to seek a creditors voluntary liquidation of Jewish Chronicle Newspapers Ltd. Despite the heroic efforts of the editorial and production team at the newspaper, it has become clear that the Jewish Chronicle will not be able to survive the impact of the current coronavirus epidemic in its current form.”

Founded in 1841 and published every Friday the paper is is expected to be liquidated this month. The Kessler Foundation who own the Jewish Chronicle say they are seeking a future for the publication while meanwhile it will continue to be published for another fortnight and the website will be updated as usual.

It is unclear what the situation is with creditors as the newspaper said it had simply run out of money. Redundancies are taking place amongst the 55 staff and it remains to be seen if a buyer can be found or if the website will continue on its own. The liquidation includes the free newspaper the Jewish News which has run for 23 years and earlier this year was thought to be about to merge with the Chronicle although the deal didn’t come about.

The coronavirus crisis is taking a heavy toll on the newspaper industry as distribution and the inability of reporters to get out and about or to meet contacts have been curtailed. Councils and many public meetings have stopped meaning journalists are unable to report on what is happening or to question officials from the police to MPs. Even parliament is closed resulting in a lack of news other than the usual statements produced by various communication departments.

ICSM Credit

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk

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An inconvenient truth about the coronavirus crisis: companies aren’t paying their invoices – but ICSM Credit has a free solution

The chancellor of the exchequer Rishi Sunak means well but the truth is UK businesses are in a crisis not seen since Black Friday in 1989. And coronavirus crisis is likely to be worse as it is global.

“Since business fell off a cliff on March 23rd when the lockdown began,” said Ian Carrotte of ICSM Credit, “Members of our credit circle have been contacting us saying their customers have stopped paying their invoices. They send out emails saying they’ve shut down during the lockdown, won’t answer the phone or respond to emails. It’s destroying really good businesses and solid business relationships.”

On March 25th, JD Wetherspoons contacted its suppliers by email to announce it would not be paying them until its pubs were reopened as it also applied to furlough its 43,000 staff. Despite the outcry by the unions, its suppliers, CAMRA, a cross party group of 95 MPs and even Piers Morgan of ITV’s Good Morning the pub chain is not alone in the practice.

Bland emails claiming to support the NHS – but it’s false

“We’ve had members emailing us with statements from their customers saying the same thing,” said Paul Carrotte of ICSM Debt Collection. “They get a bland email saying they are following the Government’s guide lines on coronavirus by closing down until the crisis ends, protecting the NHS and saving lives and would you believe it – not paying any invoices. It beggars belief as they also say they will not be answering emails or phone calls. There’s no attempt at negotiation or an explanation. Instead they are using the lockdown to get an extra 90 days of credit.”

ICSM Credit’s free offer of help

Ian Carrotte said the practice of not paying invoices was self-defeating as firms engaged in the practice would also not get paid.

“We are offering all firms a free temporary legal letter membership at ICSM Credit,” he said, “as a way of helping to unlock the problem. Our legal letters have a success rate of around 87% within 14 days. Companies pay those who shout the loudest and a legal letter shouts louder than a gentle reminder. If that doesn’t work our debt collection department have one of the best success rates in the UK in getting our member’s their money – even in times like these.”

The fashion stores New Look, Oasis and Warehouse, and the car manufacturer Nissan, are amongst a growing list of firms who have effectively stopped paying suppliers during the emergency. Ian Carrotte said it was a mistake as it sours relationships and potentially forces suppliers out of business. He said the best thing to do if payment is a problem is to be honest.

“Be upfront with your supplier. Give them a clear explanation of your situation, and give them a time frame when you can pay them (if that’s likely). They will thank you for the clear communication, and it will preserve the relationship when things improve,” he said. “As for those chasing payment and not getting anywhere call us as ICSM and we’ll set up a temporary free account and see if our legal letters do the trick. The worst thing is to do nothing as June is a long way away.”

Federation of Small Business agrees

Mike Cherry, National Chairman, Federation of Small Business said: “The power to help overcome the sudden loss of cash, brought on by the coronavirus outbreak, lies with other businesses and their ability to speed up payments to keep the cash flowing. I cannot think of a more desperate time when this business-to-business support has been needed more than ever. In the face of this national emergency we are seeing some businesses stepping up to keep their suppliers cash flow healthy and in business. We need more to do the same.”

The Small Business Commissioner set up by Government under the Enterprise Act 2016 to tackle late payment said that in normal times a third of payments to small businesses are late. The commissioner said that if small businesses were paid on time, this could boost the economy by an estimated £2.5 billion annually. But during the present crisis late payment could destroy the economy and return the nation to the situation in 1989 when Black Friday heralded a four year long recession.

How they work: FREE Legal Letters with ICSM Credit

Contact ICSM Credit by phone or email and ask for a free temporary membership to use their FREE legal letters. Once your account is set up follow the online instructions on how to complete a legal letter – it’s easy and quick – and email to your debtor. If they fail to pay then there is the option of using ICSM Credit’s highly effective debt collection service.

Checkout our latest news video: https://www.youtube.com/watch?v=nJHjslhxoz8

How to send a legal letter: https://www.youtube.com/watch?v=AIycysoFhYo

ICSM Credit

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk

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ICSM Credit Video News: emergency coronavirus special bulletin – when to use a debt collector, are banks cashing in on struggling firms and companies using the crisis to say they can’t pay their suppliers

 A special video news bulletin on the coronavirus emergency from ICSM Credit, a member of the Axbridge Chamber of Commerce.

To see the video click here:
https://www.youtube.com/watch?v=JOYcKjSBLJM

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

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ICSM Credit News: emergency coronavirus debt crisis special bulletin

With the economy falling off a cliff I’m writing to you with the knowledge that many of you will be working from home and will be extremely worried about your business.

The overheads continue while those promises from the Chancellor Rishi Sunak may well not live up to the headline billing they were originally given. Red tape, delays and unhelpful banks mean few firms can utilise the loans available and furloughing staff puts many a CEO in a quandary as there appears no Government exit strategy to the lock down.

With more than 1,000 limited companies going to the wall every week (ref: Insolvency Service) it’s vital to chase down the money that you are owed including invoices however small that date back many months.

Act now:
Use your time to go through your ledger and urgently draw up a list of overdue accounts.
Use ICSM Credit’s FREE legal letters which have an 87% success rate within 14 days.
Use ICSM Credit’s Debt Collection Department to get the cash that should be in your bank.


According to Business Matters Magazine, added up the average UK SME has a monthly cash flow of £108,000 with £25,000 overdue at any one time. With business for many literally stopping on March 23 when the lock down started it means that most firms and small businesses have tens of thousands of outstanding unpaid invoices.

Anecdotally ICSM Credit have heard cash rich companies claiming the coronavirus crisis means they cannot settle accounts. Don’t take that as an answer as it’s just an excuse. Of course there are genuine hardship cases but those should be tackled diplomatically with a payment plan. In short with the lock down in place, ensuring you get paid is your number one priority – and as a member of ICSM Credit we will help you all the way.

Don’t hesitate to call or email ICSM Credit and make sure those outstanding invoices are paid during this critical period.

Best wishes
Ian Carrotte
Proprietor of ICSM Credit
For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com

ICSM Credit, the Exchange, Express Park, Bristol Road, Bridgwater, Somerset TA6 4RR

Not a member? Join for less than a tank of diesel and protect yourself form late payers.

For a video on how to send a FREE LEGAL LETTER visit: https://youtu.be/AIycysoFhYo

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Companies permitted to trade while insolvent during coronavirus crisis

Coronavirus: company rule changes protect firms trading while technically insolvent

As companies lose footfall, orders and customers and see their cash flow disappear, the Government’s business secretary Alok Sharma has announced plans to protect firms who are technically insolvent during the coronavirus crisis.

The wrongful trading law is to be suspended so as to protect directors who pay staff and suppliers while their firm has a drastically reduced income or indeed no income at all. The business secretary announced he will make changes to enable UK companies undergoing a rescue or restructure process to continue trading, giving them breathing space that could help them avoid insolvency.

This will also include enabling companies to continue buying supplies, such as energy, raw materials or broadband, while attempting a rescue, and temporarily suspending wrongful trading provisions retrospectively from 1 March 2020 for three months for company directors so they can keep their businesses going without the threat of personal liability.

Alok Sharma said: “The government is doing everything in its power to save lives and protect livelihoods during these unprecedented times. Applying a common-sense approach to regulation will ensure products are safe and reach the market without any unnecessary delay, getting vital protective equipment such as face masks to frontline staff as quickly as possible.”

Ian Carrotte of ICSM Credit said: “The measures are designed to keep businesses afloat during the crisis when they don’t in reality have any business. Department stores, shopping centres, chain stores and many manufacturers have been left high and dry and in normal circumstances would seek administration. With no end date to the crisis uncertainty has infected British business from top to bottom. The changes will help many firms survive the emergency.”

The business minister said the wrongful trading law would be suspended to protect directors during the pandemic. The move will allow directors of companies to pay staff and suppliers even if there are fears the company could become insolvent.

For the British Chamber of Commerce Suren Thiru said: “Companies that were viable before the outbreak must be supported to ensure they can help power the recovery when the immediate crisis is over. Cashflow remains an urgent concern for many businesses, so it’s vital that government support packages reach businesses and people on the ground as soon as possible.”

ICSM Credit

For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.

To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com

For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk

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