Financially resilient companies – withstanding or recovering quickly from difficult conditions

Financially resilient companies – retaining agility through funding

John Walsham is Funding and Business Development Consultant at Kreston Reeves, accountants, business and financial advisers and Director, JDW Advisory Limited, supporting businesses and their owners to achieve their aspirations. John joined Kreston Reeves in 2019 following a 34-year career with one of the major UK banks. He has worked with businesses of all sizes helping them secure funding. John explores the funding considerations for your business below.  


Many businesses are reviewing how they would cope with a second wave of COVID or further shockwaves from Brexit.


Businesses have shown their resilience, and in the past months many have pivoted to source new markets and opportunities despite the challenges they have faced, and will face, in the months to come. They have not been tied and frozen to their original plans and have promptly looked at their resources and capabilities and compared these to market demands. 


They have modelled several future scenarios for their business and the markets they operate in. They have considered what will have the biggest impact on their business – be it customer numbers, changes in the supply chain, tightening of credit terms etc – and have made new plans to manage these challenges. They have also implemented these plans with laser sharp focus and speed.


Funding considerations for your business

Financing those plans as government loan schemes begin to close is a very important consideration. It has never been a more appropriate time to rethink how you finance your business. It is time to review your balance sheet and consider where your assets are and how you can leverage against these in the most efficient and cost-effective way.


Is there a better way to fund the future rather than the traditional facilities of an overdraft or a loan? Could the business borrow against its stock and or debtors? A few days reduced off debtor payment days dramatically improves cashflow, as does adding a few days on creditor payment days. What plant and machinery does your business own? Those lucky enough to own their premises can leverage against that asset in favour of longer and cheaper term borrowing.


There will undoubtedly be tighter credit policies going forward as the lenders seek to manage their loan books and handle increased loan defaults. Do not ignore the opportunity to make use of the Government loan schemes while they are still available until the end of November. Borrow now interest free for 12 months to create a ‘war chest’. Remember you can access the Coronavirus Business Interruption Loan Scheme (CBILS) for asset and invoice finance and you can have more than one CBILS so long as you do not borrow more than £5m in total. Do not ignore the opportunity to refinance existing borrowing over longer and better terms together with a capital repayment holiday for at least twelve months.


When approaching lenders ensure you can show the scenarios you have modelled ranging from best to worst case with supporting rationale. You stand a much greater chance of success with an integrated package of information which ties together your future balance sheet, profit and loss and cashflow forecast into one concise document which a good accountant can help you produce.


The steps to take to find the best source of funding are firstly to approach your existing lender, they have built a relationship with you over time and have detailed information about how your business and accounts have been managed and they should be focused on their existing customers. Secondly, speak to your existing private investors regarding further investment and/or consider attracting new investors.


I personally believe there will be growth in the financing of stock/debtors in 2021 against the backdrop of delays in debtor payments and subsequently rising average debtor days.


If your existing lender cannot support, then via Kreston Reeves we can support you with producing your funding request and we have access to over 100+ prospective lenders via an online funding platform including unsecured finance.


For further advice or guidance, please contact me at or visit the Kreston Reeves website