You could play a vital role in helping clients manage cashflow concerns as we approach the self-assessment deadline
January is traditionally the month when post-Christmas credit card bills arrive for consumers and businesses also feel the pinch. Some sectors such as manufacturing may have had shutdowns over the holidays whereas some such as hospitality will have been trading at peak. Either way, working capital is often stretched this month as many payments are due, not least the directors’ own self assessment tax bill.
While this is the individual’s liability, many small business owners rely on increased company salary or dividends to be able to make those payments. If the bill cannot be paid on time, HMRC will immediately add fines and penalties, bringing extra pressure to already-stressed company owners.
The post-Covid funding landscape is beginning to revert to a more commercial offering, as Bounce Back Loans and CBILS have ended, and the number of providers offering recovery loans are very limited.
There is no doubt that interest rates are increasing and facilities in 2023 are likely to cost more than the finance terms did in 2022.
Good advisers will help a business owner be realistic about their chance of success and the likely cost of borrowing. Applying early will allow more time and usually provide more choice than might be available to companies that apply when they are reaching a financial crisis.
An accountant can then objectively assess whether a finance offer makes good business sense. There is a balance to be met. The company will incur costs for finance, but by using this injection to meet their debts, they can continue to trade and grow again, making sufficient higher profits to cover that cost.
How accountants can support their clients to obtain finance
Across the Capitalise platform, we know that businesses are usually far more successful in looking for external finance facilities when they are supported by their accountants, than when they apply to lenders directly.
Most lenders use a mixture of data algorithms and then human review to assess whether a business meets their risk criteria.
Accountants can assist their clients by:
Business owners who are supported by their accountants inevitably feel more strength to tackle any challenges head on, thereby reducing their stress levels and giving them energy to build again in 2023.
If you’d like to learn how you could go the extra mile and support your business clients with Capitalise, contact support@capitalise.com or visit the Capitalise website.