It is the 7th March 2020, a day that will live long in the memory. A Saturday like any other, watching my local football team and then heading out with a few friends for dinner, bowling and drinks after. Very Rock and Roll!
But it was a phone call during that evening which made me grasp for the first time the impact that Covid-19 might have. An opposition player that day had tested positive for Covid and the ripple effect was for matches for the next two weeks to be cancelled. But not to be distracted, we continued on with our night of freedom from our children, and stumbled home at an ungodly hour.
Fast forward to today, and the 2 week postponement of games turned into 16 months without football and an even longer period for a night out with friends. The normality of that night out is now a novelty, and it is difficult to comprehend if we will ever return to those times in the medium to long term.
The only certainty we have is the crippling effect on the entertainment and leisure industry during the Pandemic and the untold pain that that sector, along with others, is still to face with the withdrawal of the various Government support packages.
In my view the full effect of Covid on the economy will only truly be felt in the next 6-12 months. Whilst the Government support was needed and welcomed, it has created a false economy in which there are many things that need rebalanced and the staff shortages, rising prices and general uncertainty are creating a perfect storm in the eye of the Pandemic.
Another major issue is that for the past 16 months there has been no tangible pressure on individuals, sole traders, Partnerships or Companies to pay their bills in full, and on time. That time is soon coming however, and the sharp teeth of Government Agencies such as HMRC and LPS will bear down hard as Boris and Rishi look to balance the un-balanceable books when Petitions resume.
The only advice to those wanting a new dawn after the painful devastation of the Pandemic is consigned to the history books is to be pro-active. Now, more than ever, I think that consensual settlements can be the new norm for the short term at least, but having professional guidance along that path is essential to add credibility when approaching creditors.
The more formal processes of IVAs, PVAs and Bankruptcy are also there to be used, depending on the circumstances and what is best for the individual or business. Over my past 15 years in Insolvency, I have come to learn that there are never any two insolvency cases the same and no ‘one size fits all’ solution. Professional advice is needed regardless of the situation but the important thing is to get the right result to survive an unprecedented period of human and economic turmoil.
Author: Thomas McKenna