AS Covid-19 pressures mount, Duncan Reid, company and commercial lawyer at Weightmans LLP in Newcastle, shares guidance for businesses

The Chancellor’s additional raft of measures to support business’s cash flow and help relieve some of the burden caused by the disruption the global pandemic, has raised many questions for UK businesses.

As a full-service law team working with owner-managed businesses, SMEs and corporates in the North East and beyond, many of our clients are seeking clarity on what the new measures mean in reality, and how accessing new funding on the ground – and quickly – will work on a more practical level.

The Coronavirus Business Interruption Loan Scheme, set to launch next week, will enable businesses to access loans of up to £5 million in value.

While the scheme will provide a lifeline for some businesses, the structure of this loan, and others announced in the new proposals, could be a cause for concern.

These are all loans that inevitably need to be repaid at some point so although it will be tempting to focus simply on surviving the next few months, businesses also need to think about their longer term cashflow. Seeking legal guidance early can make it easier to assess how any funding measures may impact the business further down the line.

As a region with a thriving night-time economy, perhaps one of the most controversial elements of the government’s advice in relation to social distancing has been to stay away from pubs and other social establishments, rather than mandating their outright closure.

This raises question marks over whether venues will be able to rely on their insurance cover – and indeed many establishments with policies in place may find they’re not covered in the event of a pandemic anyway.

With so much uncertainty around new measures and with the situation in constant flux, it’s vital directors check what insurance cover they have in place. Similarly, supplier and customer contracts must be reviewed to see if there is any provision for businesses to pause their relationships, which could provide much-needed relief.

From an employment perspective, legislation to allow small and medium-sized businesses to claim back Statutory Sick Pay (SSP) from the Government will provide organisations with some comfort. But with no definite date around when this will come into force, accurate record keeping – effective immediately - of staff absences and payments of SSP will be essential and should make the claims process a little easier.

Above all, what is most important during this turbulent time is maintaining a strong and healthy employer-employee relationship. Keep colleagues informed of business decisions, provide timely updates and remember that a lack of information or speculation could result in a breakdown of communication and further interrupt business continuity, potentially for the long-term. The businesses that are thus far proving most resilient are those who are maintaining a constant dialogue with employees and keeping one eye on the medium- and long-term impacts.