News | Tuesday, 7th April 2020

Coronavirus: Financial tips for business owners and the self-employed

Advice from our experts on the economic support available for companies and entrepreneurs

University experts are supporting small businesses
University experts are supporting small businesses

What financial support is available for business owners, entrepreneurs and the self-employed during the Coronavirus (COVID-19) outbreak?

Financial experts from Manchester Metropolitan University Business School held a virtual advice session in collaboration with Barclays on the video conferencing app Zoom in order to demystify the Government’s financial updates and discuss some of the possible developments that might emerge in the coming weeks.

Here is a transcription of the answers Julia Rouse, Professor of Entrepreneurship, Stuart Finnerty, Reader in Banking, and Mark Jarvis, Visiting Professor in Banking and Finance, gave to the questions put to them during the free webinar by viewers.

1) I’m an owner/director and don’t seem to fall into any of the categories for assistance – what can I do?

Professor Julia Rouse: There is no policy out there to protect owners and directors except, perhaps, the Job Retention Scheme if you actually furlough yourself, which we think is actually going to be possible. However, you won’t be able to work whereas under the Self Employment Support Scheme you can keep working. I have argued strongly that there should be a policy to allow people to continue trading so they can keep their businesses alive.

2) I have a start-up established after April 2019, what are my options?

Professor Julia Rouse: Depending on your National Insurance contributions, you may have access to Employment and Support Allowance (ESA) which is essentially sick-pay for the self-employed. Also, don’t be shy to apply for Universal Credit. They have changed the rules of Universal Credit during this pandemic so if you are in a low income household I would encourage you to visit entitledto.co.uk to find out what you can access.

3) When applying for a loan, what can you do to increase your chances of success?

Stuart Finnerty: First of all, remember that your banker is likely to be under huge pressure and away from the office so make it as easy as possible for them to agree to lend you money.

Send them a summary of what your business does and how it works. Also, send them your latest financial statements or balance sheets, explaining any anomalies such as large one-off expenditures. You also need to talk about the pandemic and the impact this had on your business with a cash-flow forecast for the coming months.

Ultimately, be clear what you need from the bank and assume they have nothing to hand so send them as much financial information as possible by email.

4) What are the possible changes to SME support in the future?

Professor Julia Rouse: I think it is unlikely that we are going to see grant support in the future. We know that a lot of small businesses and self-employed workers generate a very small income. As much as my colleagues and I are fighting the fight for the self-employed, this period will offer many people time to reflect and consider the future of their business and working lives. In that respect, it would be great to see the Government offering a form of business exit help.

Stuart Finnerty: To add to this, I think some banks will face criticism during this period for turning customers down for financial help. If you are turned down, then you should approach different banks but also ask yourself if getting into future debt is the best thing to do.

5) Which sectors are predicted to recover quickest after the pandemic?

Professor Mark Jarvis: It really comes down to those industries that can cope with being stopped and then started back up again. If we are talking about sectors, seasonal trades such as tourism, hospitality and aviation will be impacted significantly. I think transportation and manufacturing have good chances of catching up once the supply chains have been restored but ultimately it depends on the health of the nation when business is resumed.

The full briefing session can be viewed again here, which includes an introduction and overview from our experts:

The session was the first of a series of short online briefings, hosted in partnership with Barclays, designed to clarify the complex financial options available for businesses navigating these uncertain times.

Details of future sessions will be available soon and if you would like to find out more, contact cpe@mmu.ac.uk

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