cashflow coalface

At the cashflow coalface

As May turns to June businesses arrive at a place that many could not forsee and envisage. Furlough payments have started to flow, CBILS and Bounce Back Loans have been applied for and in most cases received.

Businesses now face the challenge of managing their cashflow in difficult times. Prioritising key suppliers, managing postponed overhead payments, communicating with other stakeholders and HMRC are all part of the challenges to be faced.

The difficulties of managing cashflow

Gaining an understanding of the cash inflows is also part of this challenge. How long will the current funds last? When are debtors likely to pay? When will it be possible to resume ‘normal’ trading.

The cashflow coalface is a challenging place. It changes on a daily basis as cash that is expected doesn’t come in and payments out are changed by unexpected demands. Visibility and priority are key. Which payments should be made, the context of importance and making sure that funds are well utilised.

Many SME owners did not sign up for this when they started in business. These are unforeseen challenges, with many businesses not having sufficient reserves to see them through. Government assistance has been forthcoming but not always in the form expected, CBILS loans that many expected to get have not materialised and Bounce Back loans have become the ‘go to’ saviour for many.

Not knowing how long that will keep them going is keeping many owners awake at night. The key here is planning. Visibility of cashflow, both in and out is key. Good communication – with all stakeholders, provides some understanding of the direction of travel. Cash preservation is still the main challenge – but also understanding the ripple effect of withholding payments – cash has always been the oil that keeps the machine turning.

The focus for the next 6-12 months has to be cash – profit is secondary. The ability to trade is now the primary function – and also understanding repayment capacity as many businesses seek to work out whether they can afford the cost of the CBILS and Bounce Back loans they have taken.


Richard Mason of Ludgate Finance wrote this article. Richard explains, “following a move to an advisory role in 2007, it became clear that SME’s were struggling to be serviced by the banks. Alternative finance sources were required. With the advent of peer to peer lending, I sourced and completed over 200 deals. I raised in excess of £30 million to support SME’s in their growth and acquisition ambitions.”

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