Podcast: Help clients attain financial stability
During the past year, Covid-19 business interruption loans turned accountants into de facto corporate finance advisers. This podcast offers practical advice on how to play that role.
With the arrival of coronavirus business interruption loans (CBILS) and bounce back loans (BBLS) in 2020, nearly 2m businesses turned to their advisers for help in selecting and applying for suitable support loans. The government-backed funds came with 12-month interest-free periods, which are now expiring.
The need for extra cash to meet those repayments or, for those who were lucky enough to prosper or pivot during the pandemic, to take advantage of new growth opportunities is building demand for business finance.
With this need in mind, online finance platform Capitalise.com has been fleshing out its concept of capital advisory, the provision of advice and hands-on services to help business clients access the funding they need to cover cash shortfalls or to invest in growth.
As part of that initiative, Kirsty McGregor, founder of the Corporate Finance Network and informal “accountant in residence” at Capitalise joined AccountingWEB editor in chief John Stokdyk and accountant Keir Warwick from Bulley Davey to discuss the client need for finance and advice in the aftermath of the pandemic and the ins and outs of providing an effective capital advisory service.
Proactive accountants should anticipate funding needs and steer clients to suitable sources of new finance, even if they are shying away from finding new finance routes to give them more resilience, argued McGregor during the podcast.
“A lot of [clients] are just sitting and waiting a little bit. Although there was a big drive to do cashflow forecasts and projections this time last year, that appears in a lot of cases to have been a one-off exercise and hasn’t really carried on. So a lot of business owners are going into 2022 with their eyes closed, which is a bit worrying,” she said.
At Bulley Davey, Warwick has embraced capital advisory and has been running the forecasts and examining the repayment schedules to alert clients to potential issues before they really start to bite.
“They’re not forward thinking at the minute, they’re fighting the day-to-day rather than planning for the future when these repayments are going to hit,” said Warwick. “Most of the debt our clients have incurred is a year old now and almost forgotten about.”
When it comes to finance, forewarned is forearmed and Warwick was able to help one kitchen retailer with a Bounce Back Loan to move onto a Business Recovery Loan to see them through the next period.
The 30-minute capital advisory podcast works through a number of other common funding scenarios with McGregor and Warwick offering practical tips on how to respond. These examples include:
The commercial impact of filing clients’ accounts and techniques the adviser can apply to help improve their credit scores and access to potential funding
How to help a business that wants to grow to access funds to allow it to scale up
Business recovery and credit improvement tactics such as invoice finance for clients struggling with customer payments and working capital management.