UK MANUFACTURERS NEED £650M IN APRIL TO SURVIVE 2020 U H
ello readers and
welcome to the April issue of Irish Manufacturing. What strange times these are for us all, and nothing I’m sure many of us have seen in our lifetime. We hope that in continuing to
bring you the latest news and updates, we can not only keep you informed, but also bring a bit of normality back to your day-to-day life. In this issue you’ll find many
stories on what manufacturers are doing to combat the crisis we’re facing, and as an industry it’s amazing how we have come together. If you have anything to share
with us, if you are helping the cause against Covid-19 please feel free to email me on
rtucker@datateam.co.uk. For now stay safe and take care. Rachel Tucker - Editor
K manufacturers are facing a precarious future according to insights from fintech business lender
MarketFinance. Over two thirds (68 per cent) reported their order books have halved in the last 30 days. To compound matters, the majority (67 per cent) have less than £50,000 cash and without any support will run out of money before the end of the month.
Loans Over half (51 per cent) of manufacturers are interested in accessing funding through the Coronavirus Business Interruption Loan Scheme (CBILS, which offers up to £5m interest free for the first year, over six years) to shore up their business for the medium to long term. The majority (33 per cent) of manufacturers are seeking an average loan of £62,500, equivalent to £417m for the sector. Just four per cent were seeking a £10,000 loan, one in ten (11 per cent) need £17,500 and a further three per cent need £300,000. If they are unsuccessful in securing a business loan, most reported they would turn to invoice finance (finance on outstanding invoice payments owed to them).
Cash flow With March revenues halved and near term prospects looking uncertain, most manufacturers (64 per cent) have revised down their order books for 2020 by 40-50 per cent. They are seeking short term solutions to remedy finance concerns. They ranked a larger overdraft facility as first preference before seeking a business
credit card and in third place, using invoice finance as a means to inject working capital into the business. Anil Stocker, CEO at MarketFinance, commented:
“Manufacturers are in urgent need of support. All the industry indicators show orders are down and unlikely to recover much this year. They have been hit hard by the COVID-19 outbreak. A number of firms have had to shut their doors and some that remain open are pivoting to make products that support the national effort to contain the spread of the virus. It’s imperative that we back these businesses.”
Advice Most (36 per cent) manufacturers are turning to their accountants for advice on what to do next before consulting their friends and family (19 per cent). One in five (18 per cent) are seeking advice from their bank manager. Business owners feel their accountants are the most accessible given the remote working environment. Anil Stocker added: “Manufacturers turning to their
accountants for support as their trusted advisors during this period of uncertainty. These accountants have the tools and know-how to support them in revising their cashflow forecasts, applying for loans and making contingency plans. It’s important for everyone – bank managers, accountants, financial advisors - to come together to support manufacturers. Business advisors will need to bring all their energy, skills and experience to save British manufacturers across the country.
https://marketfinance.com/
4 APRIL 2020 | IRISH MANUFACTURING
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