According to the Treasury, £31.3bn has been lent out under state-backed loan schemes to Britain’s smallest businesses. The sheer number of loans approved is at a level that we have never seen before, but banks are worried that as much as half of these loans will not be repaid.
While the relative ease of accessing these loans and the attractive interest rates has been welcomed you must remember that its ‘not free money’. These loans must be repaid!
While you have a 12-month reprieve from making repayments, it is vital that you take this time to plan how you are going to pay the money back.
Obviously you are going to be focusing on rebuilding your business but work with your accountant now to prepare a cash flow statement for the next 12 months which will help you to visualise and prepare for any future roadblocks.
Cash flow forecasts are an amazingly simple but underused accounting tool that can help businesses avoid trouble ahead.
Do you regularly update your cash flow forecast?
#cashflow #forecast #bouncebankloans
