Strategies for Struggling Businesses Emerging from the Pandemic

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2020 and 2021 have been bad years for most businesses. With shops shuttered, factories closed and events cancelled, rosy profits have transformed into shocking losses. 

Despite the disruption, it may surprise you to learn that the global economy only shrank by 3.2% during the 2020 calendar year. 

Businesses could employ one of many strategies in 2021 to help save cash, drive sales and otherwise navigate these tough trading conditions which is seeing many businesses become insolvent

Take advantage of continuing furlough scheme support where available

The end of lockdown in the UK has created an atmosphere of cautious optimism amongst business owners, but the ‘re-opening’ of economies is not always evenly distributed. 

Cinema chains report significantly lower audiences than pre-pandemic, and high-end restaurants which lived off client & staff entertainment from corporates are still left wanting, as city offices still remain totally empty in many British cities. 

As a result, businesses should remain alert to the continuation of state support, such as the furlough scheme. In spite of news announcing the end of the furlough scheme, it actually remains in place until 30 September 2021, albeit in a less generous form than when originally launched. 

In August and September 2021, businesses will be required to pay 20% of furloughed workers wages, with the government paying 60%, and the employee sustaining a 20% pay cut. While this places more cost on the employer, 20% is still a bargain compared to paying 100% of an unproductive worker’s wage in a business that’s still quieter than you’d like. 

Seeking fresh financing through the Recovery Loan scheme

Further afield, there’s the UK Government Recovery Loan Scheme which claims to “support access to finance for UK businesses as they grow and recover from the disruption of the COVID-19 pandemic.” 

The scheme sees the government stand behind 80% of the value of qualifying loans made from banks and other traditional lenders to businesses until 31 December 2021. 

This government guarantee is helping to keep the interest rates on such loans low, despite the increased risks to banks who are lending to often heavily indebted businesses at this time. 

A recovery loan could allow businesses to repay or restructure more expensive debt accumulated during the pandemic. When thrust upon hard times, business owners have often resorted to short-term loans with high interest rates which aren’t suitable given the length of time it may take to pay back. 

By restructuring high-interest corporate debt with a low-interest solution, businesses may find that they’re able to pay down and eventually completely rid themselves of their pandemic debt burden. This way, they may avoid becoming one of the 160,000 ‘zombie’ companies in the UK. A zombie company is one which is barely alive, using all of its cash flow to service the interest on sizeable debts, resulting in an inability to grow the business, and which lenders want to keep alive, resulting in a ‘zombie’ company.


While the UK appears to be carefully emerging from the effects of the pandemic, many businesses are far from being in rude health. Until the good times return, businesses should remain alert to the variety of state support still available to businesses in 2021. 

These will help to subsidise loss-making ventures or maintain their solvency for when the market demand for goods and services returns to normal. 

Also Read: The 6 Golden Rules of Effective Management



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