Managing one's cashflow in a time of crisis

This article is part of
Guide to running your business

The UK government has projected that levels of sickness from the Covid-19 outbreak are likely to peak during June, which may well impact service levels at provider call centres across the country. 

IFAs looking to transact with clients during this period are advised to register for enhanced online services from providers now, if they have not already done so.

Getting registered for providers’ digital services now will allow intermediaries time to call support centres with any registration issues before staffing levels drop.

While digital service provision varies between providers, some offer digital case submissions, account management systems and reams of product literature. 

“If the phones aren’t being answered at the [provider’s] offices, there may be some support available through provider websites and portals,” Ms Jhumat says. 

“I do expect more offices will be closing and service to deteriorate as more staff work from home, but I don’t see why intermediaries can’t continue to write business and support their clients.”

Protect cashflows

While many intermediaries will be familiar with personal protection products for their clients, IFA business owners should also spend time searching the options available for businesses.

One example is personal guarantee insurance, a policy designed to provide protection against business owners who have taken out loans using their personal possessions or homes as security. 

According to research conducted by provider Purbeck, applications from small business owners for such cover has increased by 84 per cent between the start of February and beginning of March.

“Our figures show that increasing numbers of small business owners are taking action to reduce that risk, potentially over fears related to coronavirus but also to help sustain cash flow in the face of the ongoing challenges around late payment,” says Todd Davison, managing director of Purbeck Insurance Services. 

“The key is to ensure cover is in place before the business starts facing financial difficulties.”

Mr Davidson explains that while lenders have been keen to extend credit terms to small businesses, to help any financial strain from the virus, it is important that IFA firms do not forget to assess the risks that come with any new borrowing.

“Any loan comes with a risk and, more often than not, this will fall on the shoulders of the business owner if they are required to sign a personal guarantee,” he adds.