£50bn reopening working capital risk for SMEs in the North West

By Azets

09 Apr 2021

general-business-sme-growth.jpg

Businesses in the North West looking to reopen and capitalise on a potential £50bn boom in consumer spending could face a major new insolvency risk – a lack of working capital, a leading restructuring expert is warning.

The warning follows comments earlier this year from the Bank of England (BoE) Chief Economist recently said that consumers have saved more than £180bn during lockdown, and that when the economy re-opens consumers could be set to spend as much as £50bn.

“The economy is currently set for a succession of ‘opening-up’ dates in the coming months with many thousands of businesses gearing up to begin trading again.

Unfortunately moving from being effectively mothballed to full-on trading can bring its own suite of financial problems, in particular a lack of working capital, and it is important that business owners are aware of the risks” said Nicola Clark, Head of Restructuring in the North West at Azets, the UK’s largest accountancy firm specialising in the SME market.

“Businesses, in particular the hospitality, retail and leisure industries will have to invest in stock, staff, systems and processes. During lockdown, many businesses will have had to finance property maintenance costs such as heating, lighting, insurance and inspections. Furlough will soon finish, and any loans or grants will likely be depleted.

“In addition, preparing to start trading again from effectively a standing start will require considerable investment for many businesses and although some will be in the fortunate position that they have cash in the bank, others will be faced with the problem of financing the business opportunities that will emerge during the coming months. Government cash has helped businesses to survive, but the next major challenge is that businesses will also need cash to trade and survive the stresses of reopening.

Nicola Clark urged business owners in the region to plan ahead, avoid trying to operate at full capacity from day one, and ensure there will be sufficient cash on hand to finance daily operations.

“Hospitality, retail and staycation providers should benefit from prompt cash payments, but other business sectors could find it takes weeks and months to be paid. Whilst a consumer spending boom is highly likely, it may not be as large or as swift as has been suggested. We would encourage business owners to take a careful approach to reopening, ensure they have updated their business plan and have a clear view of where the cash will be coming from, and when.

“However, business owners who may be concerned that their businesses may not have sufficient funding headroom should be reassured that there are a number of restructuring options available, and the earlier advice is sought the better”. 

Latest news

1

Beever and Struthers advise on £1.5bn funding for 2,000 new social homes a year John Jones

Beever and Struthers advise on £1.5bn funding for 2,000 new social homes a year

03 Jul 2025

2

Airframe Designs aligns with US programme for additive manufacturing growth Additive manufacturing technology unit At Airframe Designs

Airframe Designs aligns with US programme for additive manufacturing growth

03 Jul 2025

3

Panache Cruises on course for further growth with support from Rosebud James Cole

Panache Cruises on course for further growth with support from Rosebud

03 Jul 2025

4

Lancashire emerges as key player in UK's Defence and Tech Sector Mo Isap Chair Of The Lancashire Business Board Nick Miles National Cyber Force Deputy Director For Samlesbury Annette Weekes Representative Of The NWRDSC

Lancashire emerges as key player in UK's Defence and Tech Sector

03 Jul 2025

5

Report shows impact of BAE Systems in Lancashire BAE Systems Radar

Report shows impact of BAE Systems in Lancashire

02 Jul 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
LBV123 July/August Launch Event
Lancashire Business View magazine launch
Networking
16 Jul 2025

LBV123 July/August Launch Event

Burnley

08:30 - 10:30

Lancashire Built Environment Conference 2025
BEC 315 X 315 Px
Networking
25 Sep 2025

Lancashire Built Environment Conference 2025

Blackpool Football Club, Blackpool, FY1 6HX

08:30 - 13:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

The Marketing Metrics that Matter – July 4
LBV Hub Seminars
04 Jul 2025 - 04 Jul 2025

The Marketing Metrics that Matter – July 4

Door4 Office, Burnley Wharf, Burnley, BB11 1JG

08:30 - 11:00

Tri-Site Survey Equipment Showcase
unnamed (2).jpg.jpg
LBV Hub Seminars
09 Jul 2025 - 09 Jul 2025

Tri-Site Survey Equipment Showcase

Crow Wood Hotel, Burnley, BB12 0RT

09:30 - 16:00

Blackburn Cathedral hosts Champagne and Diamonds Event with Ainsworth Jewellers
Champagne-Jewellery 10 07 25_page-0001.jpg.jpg
LBV Hub Awards
10 Jul 2025 - 10 Jul 2025

Blackburn Cathedral hosts Champagne and Diamonds Event with Ainsworth Jewellers

Blackburn Cathedral, Blackburn, BB1 5AA

18:00 - 20:30

Choose Chorley for Business - Talent Reimagined Business Breakfast
talentreimaginedbb.png.png
LBV Hub Seminars
10 Jul 2025 - 10 Jul 2025

Choose Chorley for Business - Talent Reimagined Business Breakfast

Strawberry Fields Digital Hub, Chorley, PR71PS

08:00 - 10:30

Shaping Preston's future by remembering its past
1750160034867.png.png
LBV Hub Networking
16 Jul 2025 - 16 Jul 2025

Shaping Preston's future by remembering its past

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 20:30

Chamber Summer BBQ
LBV Hub Social
17 Jul 2025 - 17 Jul 2025

Chamber Summer BBQ

The Borough, Dalton Square, Lancaster, LA1 1PP

17:30 - 20:00

Preston Tech Connection: Web3 is Dead. Or is It?
July Longer Banner.jpg.jpg
LBV Hub Networking
29 Jul 2025 - 29 Jul 2025

Preston Tech Connection: Web3 is Dead. Or is It?

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 19:30

Preston Freelancer Meet-Up: July
Longer July Banner.jpg.jpg
LBV Hub Networking
31 Jul 2025 - 31 Jul 2025

Preston Freelancer Meet-Up: July

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 11:30

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV122 Online Graphic
Subscribe now

Weekly news bulletin