Know your COVID business survival strategy

30th July 2020

As the UK economy continues its recovery from the global pandemic, you will no doubt be weighing up the options for your business and working out your post-COVID business survival strategy. Depending on the loans and grants you may have already received, you could be looking at a relatively healthy bank balance at the moment – but it’s essential you know your numbers to give your business the best possible chance as we continue to navigate these uncertain times.

This guide will walk you through the key things you should be considering when planning your Covid business survival strategy.

know your covid business survival strategy

Have you claimed all the support available?

You may have already received government grants and loans but it’s worth double checking that you’ve claimed all the support available to your business in case there’s something you’ve missed and factoring it into your Covid business survival strategy.


The Self-Employment Income Support Scheme (SEISS) allowed eligible self-employed people to claim a taxable grant of up to 80% of their average monthly earnings during its first phase, and 70% in its second phase. It’s too late to apply for the first phase which covered March, April and May, however applications have not yet opened for phase two, which will cover June, July and August. Under the scheme you’ll be able to claim 70% of your average monthly trading profits for a three month period, up to a maximum of £6,750.

Remember, while this grant does not have to be repaid, it will still be subject to tax and NICs so you will need to factor that in when considering your cashflow. You can check your eligibility for the scheme on HMRC’s website.


The Job Retention Scheme has now been replaced with the Flexible Furlough Scheme, giving employers greater flexibility in rotating staff in an out of the workplace on a part-time basis, rather than the original three-week minimum furlough period. It’s too late to furlough employees for the first time (with some exceptions, such as anyone returning from maternity/family leave) but you can continue to claim for those you have already furloughed until 31st October 2020.

It’s important to bear in mind that the level of support will be gradually reduced to 60% by the time the scheme ends in the autumn, and you’ll also need to start making pension and NICs contributions from September. The scheme is fairly complicated so we’d recommended reading our guide to fully understand the rules.

Once the scheme ends, you may also be eligible for a bonus of up to £1,000 per employee if you continuously employ them until the end of January. You can read more about this in our round-up of July’s Summer Statement.


There are several different grants available and what you are eligible for will depend on your business size and sector. Options include:

  • Small Business Grant Fund (SBGF) – small businesses based in England which pay little or no business rates are eligible for a one-off grant of £10,000, paid via your local council. Check your eligibility for this grant here
  • Retail, Hospitality and Leisure Grant Fund (RHLGF) – businesses in this sector with a rateable value of up to £51,000 are entitled to a grant of up to £25,000 (or £10,000 if your property has a rateable value of £15,000 or under)
  • Local Authority Discretionary Grant – this grant has been introduced to support businesses which are unable to claim under the other funds. The eligibility criteria is more complicated than the previous funds and you’ll need to show that your business has suffered a significant loss of income due to the pandemic

Government Loans

In addition to cash grants, businesses can also apply for a variety of loans. Schemes available include:

  • Coronavirus Business Interruption Loan Scheme (CBILS) – UK-based businesses with an annual turnover of up to £45million can apply for a loan of up to £5million. The Government will guarantee the first 80%, as well as paying interest and fees for the first 12 months, however you will still be responsible for eventual repayment to the lender. To apply you’ll need to prove your business would be viable if it weren’t for the pandemic. This scheme is open to all businesses, with the exception of banks, insurers, public sector bodies and state funded schools
  • Coronavirus Large Business Interruption Loan Scheme (CLBILS) – aimed at larger businesses, this scheme operates similarly to the CBILS, however there is a higher ceiling (£200million) and more stringent application criteria
  • Bounce Back Loan Scheme (BBLS) – SMES can claim between £2,000 and 25% of their annual turnover to a maximum of £50,000. Under this scheme you will borrow from one of 11 participating lenders, with the Government guaranteeing 100% of the loan and paying any interest and fees for the first year. After year one interest will be capped at 2.5%. Please note you can’t apply for BBLS if you’re already claiming under CBILS or CLBILS, however if you have received a loan of up to £50,000 under these schemes you have the option to transfer it to BBLS if you arrange it before 4th November 2020
  • Coronavirus Future Fund – delivered by the British Business Bank, this fund offers loans of between £125,000 and £5million, provided the amount is at least equally matched by private investors. It might be suitable for your business if you rely on equity investment and are unable to access other Government schemes due to be pre-profit

Sector specific support

Depending on your business sector, there are a number of other schemes available including:

You can find a full list of the organisations and trade associations providing support for different sectors here.

Sick Pay

Under the Government’s Coronavirus Statutory Sick Pay Rebate Scheme you can claim back up to two weeks’ statutory sick pay (SSP) for any employee who has had to take time off work due to coronavirus (including if they have had to self-isolate). There is eligibility criteria to follow so double check the Government website to make sure you can claim for your employees.

Have you spoken to your insurance provider?

If you haven’t already, you should check with your business insurance provider if you are covered for any loss of earnings due to business interruption.

There has been some controversy over this after many insurers refused to pay out, claiming their policies were not designed to cover loss of earnings due to Government-imposed lockdown.  The Financial Conduct Authority (FCA) is currently fast-tracking a test case to clarify policy wording on behalf of thousands of business who believe they are entitled to a payout. Although the test case only covers eight insurers – Arch, Argenta, Ecclesiastical, Hiscox, MS Amlin, QBE, Royal & Sun Alliance, and Zurich – it is hoped the result will provide clarity to other insurers and business owners.

Another important insurance consideration is whether your policy covers your employees working from home. You have a legal obligation to arrange employer liability insurance to cover you in the event that an employee suffers illness or injury as a result of their employment. A common issue for homeworkers is repetitive strain injury caused by unsuitable equipment. With many employees forced to quickly pack up their desks and set up makeshift offices at home, it’s likely that many will suffer from RSI as a result of an unsuitable set-up. You’ll need to ensure you continue to complete the relevant health and safety questionnaires and provide any equipment employees need, such as raised keyboards or mouse mats with built-in armrests.

Employee wellbeing isn’t the only insurance concern. You should check that your cyber security isn’t compromised by remote working, and make sure your insurance policy covers you for any attacks during this time.

Is re-opening the best financial decision for your Covid business survival strategy?

It is worth crunching the numbers to check that re-opening is the best financial decision at the moment. You should also check the Government’s sector guidance to be aware of any additional Covid-related costs – e.g. any PPE you are required to supply to customers or employees. You’ll also need to factor in the loss of earnings due to social distancing – for example, having less customers in a restaurant or allowing extra time between customers for cleaning.

There may also be other considerations depending on your sector. If you’re a service provider, have all your clients returned to work or are their accounts on hold? Can you afford to employee a full team of staff when reduced income is taken into consideration, or does it make more financial sense to keep employees on furlough until the scheme ends?

You could consider if it’s more affordable to temporarily pivot the business. For example, if you are a restaurant switching to takeaway food/drink may be more cost-effective in the short-term. Shops can move online. There are tools on social media sites like Facebook which allow you to easily open an online shop without the need to build an e-commerce website.

Long-term, it might be a good idea to consider whether you still need your existing offices if remote working has been a success. You could think about downsizing and giving employees the option to work from home permanently.

Factoring cashflow into your Covid business survival strategy

Your cashflow is the most important thing to consider when planning your Covid business survival strategy and it’s essential you don’t get caught out by under or over-forcecasting. Any loans and grants you’ve received may mean you have a healthy bank balance at the moment, but remember that the pandemic is not over and it’s essential to carefully forecast.

The first thing to consider is whether you will be able to continue meeting your financial obligations, such as rent, insurance and payments to creditors. If you are worried about meeting these it might be a good idea to contact your creditors now to find out what options are available to you. They may be able to relax deadlines or offer flexible payment plans.

Remember that while the Government-backed loan schemes offer a little breathing space and better terms than traditional loans, you will eventually need to repay them in full and should factor this in to your future plans. Grants do not need to be repaid but remember that they are taxable and you will need to include these payments in your planning.

The uncertainty around how lockdown restrictions will continue to ease or be re-introduced, partnered with the unpredictability of the economy at the moment, means it may be very difficult to accurately forecast your cash flow. Remember that you may need to plan for unforeseen expenses such as a reduction in customer numbers, additional cleaning/PPE costs, a phasing out of furlough payments and increased rate of employee sickness.

If you pay tax under the self assessment system, you may also want to consider whether taking advantage of HMRC’s option to defer July’s payment until January 2021 is a good idea. Experts have warned that some taxpayers may find themselves in a worse position later down the line, as the deferred payments will be due on the same date as any 2019/20 balancing payment and first 2020/21 payment on account is due. This means you will need to make sure those funds are available, so think carefully about whether it is safer to make the payment now if you have the cash available.

Talk to the experts

We know that putting together a Covid business survival strategy can seem like a daunting task and it’s a good idea to seek expert advice. Our friendly team are always on hand to offer support. Get in touch.

All information correct at time of going to print/live and on the best knowledge and understanding of the author at the time.  This article is for general information only and does not constitute financial advice or recommendations for individual circumstances.  No responsibility is taken for any actions taken on the base of the information within this article.

Chartered Accountants in Sunderland, offering expertise on everything from Tax and Business Planning,
to Accounts and VAT.