With furlough set to end on 30th September 2021, there isn’t a lot of time to figure out what your financial plan should be to manage cash flow. With employees currently receiving 60% of their salaries for hours not worked up to £2,500, and employers covering 20% currently, things are about to drastically change. You may be wondering what the options are when it comes to managing cash flow come the end of this month. We can offer some top tips to ensure that you do not find yourself in a difficult situation once the furlough scheme has come to an end.
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Redundancy Alternative
Although redundancies are a viable option, no employer truly wants to make their employees redundant. Although redundancies can help lower short-term employment costs, some elements should be taken into consideration.
Options include:
- Redeployment
This involves moving members of staff to other areas of the business. This can either be on a permanent, or temporary basis to help manage your cash flow.
- Lay-offs:
Unfortunately, lay offs aren’t off the cards, but can help save your business cash. If you cannot continue to afford to pay staff who are unable to work due to the end of furlough, employers can discuss the option of unpaid leave with their staff.
- Reduced hours:
This could be a win-win solution for you and your employees. You can save money, while keeping your employees in employment. If your business is experiencing a downturn in demand this may well be the best option.
Business Loans
Payday loans for businesses can help alleviate cash flow difficulties. Taking out business finance could help to provide you with the cash injection you may be needing to help mange your funds in the demise of furlough.
This type of loan can be used for any legitimate business purpose. Thankfully, this is inclusive of paying existing staff and hiring new ones. Additionally, if you find yourself in a time of need, you can also use a loan such as this to buy stock, increase customer demand and invest in new necessary equipment or supplies for your company.
Business Overdrafts
Business overdrafts are another option to help post-furlough cashflow. This allows a business to continue accessing funds, even when your bank balance drops below zero. As with all types of finance, you will need to pay interest on whatever the amount you borrow is.
Asset finance
Asset finance, as you may be well aware, allows you to finance your facilities, equipment, or any other kind of property, in order to spread the cost of an asset of a set period of time. At the end of the term, you will have the ability to pay the remainder of the cost off so you can own it, return it or upgrade to a more modern model.
With many options available for you to manage your finances following the end of furlough, you should be able to keep your cash flow steady, and potentially even retain your employees.
