UHY Hacker Young Chartered Accountants have prepared a guide to help auto dealers prepare applications for government loans to help businesses in the wake of the COVID-19 coronavirus outbreak.
UHY said it is essential for dealers to prepare for the release of government loans, which were announced earlier this week and represent around £ 330 billion from the support program described by Chancellor Rishi Sunak, to help short and medium term. term cash requirements.
But the auto accountant also expressed concern over the lack of arrangements for large car retail groups after the government set a maximum turnover of £ 41million among its criteria for eligibility.
While there are support options such as Bank of England Bonds for ‘Big Business’, these are not actually intended for large sales-based automotive distribution groups, in particular. because of the nature of high value stocks being sold, he said.
For retail car businesses eligible for a government loan, UHY expects the application process to be very similar to EFG loans introduced in 2009 and released through the banking network.
In order to get your business ready for the next week when these loans are expected to be available, UHY suggested that auto retailers start gathering the following evidence / documents to help them apply for the loan quickly:
- Annual performance of the company in 2019
- MI at the end of February demonstrating that the business was viable at this stage
- Detailed three-month rolling cash flow forecast, evolving to a higher six-month forecast with assumptions
- Statement of assets and liabilities
- Bank statements
- Measures taken by the company to protect itself financially against COVID-19
- Actions taken by shareholders to support the company such as reduction of profits, drawdowns, cash injections
- Business plans for the coming weeks for different scenarios
- Understand the likely level of funding required and a high level plan for how this loan would be repaid in the future
David Kendrick, Partner at UHY Hacker Young, said: “It has been stated that there has to be a viable underlying business case for this loan to be available. Please take action now in advance so that you are in a good position to act quickly when it becomes available to everyone. “
“We also strongly recommend all businesses contacting the HMRC COVID-19 hotline and requesting a VAT and PAYE payment deadline agreement which is typically a payment holiday of at least 3 months – this has been granted to a large number of businesses by simply taking the time to call 0800 0159 559.
A number of companies in the automotive retail sector have already taken their own steps to help retailers who are starting to feel the impact of the coronavirus outbreak.
Earlier this week, Group Managing Director Peter Vardy, Peter Vardy offered a three-month free trial of his SilverBullet online car sales ecommerce platform to help businesses that currently have no way of facilitating “contactless” online selling.
And yesterday (March 19) Auto Trader has announced that it will waive its advertising fees for April and deferring payment of its March fees in an effort to help retailers.
Auto Trader issued a statement via the London Stock Exchange to reveal that the move would likely result in a loss of £ 6-7million next month.