Wayne Thomas, partner at Bates Weston, looks at the cashflow pressures that are mounting for businesses.

As we enter a third national lockdown, many businesses believe things will get worse before they get better, but accept that we must get the health crisis under control to create a sustainable economic recovery.

The additional support for retail, hospitality and leisure sectors announced by the Chancellor is helpful, as is the Discretionary Grant Funding, but still leaves many businesses, particularly those in supply chains, badly affected. Businesses should have access to Bounce Back Loans and Coronavirus Business Interruption Loans, but servicing the debt they are taking on is a further burden.

While hope is placed in a smooth and rapid roll out of the vaccination programme, most commentators believe businesses are unlikely to see real economic recovery until May/June 2021. In the meantime, the cashflow position will continue to be precarious as several “cliff edges” approach.


  • the beginning of deferred VAT payments from 2020, scheduled to begin in March 2021
  • Coronavirus Job Retention Scheme scheduled to end in April 2021
  • business rate exemption for retail, hospitality and leisure scheduled to end in March
  • Bounce Back Loan payments on the Pay as You Grow basis expected to begin from March – i.e., 12 months after initial BBL loan made.
  • Coronavirus Business Interruption Loan Payments are expected to begin in March – i.e., government ceases to pay interest and any fees 12 months after initial CBIL loan made.

The CBI and other industry bodies are calling for the Treasury to review these arrangements to relieve cashflow pressures on beleaguered businesses and to review them quickly, giving businesses the certainty they need to plan ahead.

If you need our help in managing your cash flow position, please do get in touch.