‘The directors are very disappointed that their insurance policies have turned out to be completely useless’
The company creates, operates and manages successful country wedding venues across the UK. The group has an annual turnover level of approximately £2.5 million. The coronavirus crisis has almost completely shut down the business, with only three of their 15 permanent employees still working. The 12 remaining permanent members of staff have been put on furlough but approximately another 40 self-employed workers will not be offered any hours for the foreseeable future.
The three employees still working are ‘customer facing’ and are dealing with rearranging wedding dates for disappointed customers, as well as booking weddings for new customers in future years. Weddings are currently being rearranged to dates from August onwards, but these will be delayed further if necessary as more decisions are taken by the government.
The group believe they are likely to be one of the last categories of business to be able to start operating as normal again. One worry is doing what they can to protect booking income for next year so one important income stream is not badly affected. If this year’s weddings end up needing to be pushed into next year then fewer dates will be available for new bookings. The directors are considering all options to deal with this scenario including using alternative and ‘pop-up’ venues.
The directors are very disappointed that insurance policies (both business interruption and wedding protection policies) have turned out to be useless and no claims whatsoever can be made. They have not currently applied for a loan under the CBILS and are seeing increasing their debt levels as a last-ditch measure. The CBILS loan option would definitely be more appealing if the government were offering a 100% guarantee rather than 80%, or if the 12-month interest and fee-free period was extended.
The current focus is on reducing as many costs as possible. They have various finance agreements with a range of providers, Funding Circle being the principle lender. Most finance companies have been flexible on payment holidays, usually for three months, but Funding Circle gave two options. The first was to reduce payments by two-thirds for three months; and the second was a full payment holiday for three months, but for this additional security was required, including access to directors’ personal assets!