Dear Mr./Mrs.,
It has passed almost three weeks of confinement after the Covid-19 state of alertness; since then, us, businesses and self-employed, we have tried to embrace the situation, understand the new scenario, take the first measures related with our more direct collaborators, check our liquid assets, while analysing the fixed costs in a more immediate way. Now, time has come, in a general way, to focus ourselves on other matters.
We are sure that the aim of all of us is to assure, on the best terms, the business ongoing commitment in such uncertain scenario; about time and consequences, on a second-level, we would like to recommend you the following Action Plan:
Make a cash-flow projection considering the different possible scenarios: considering two, four and six months ahead; it is a hard work to do, but it is worth to do the effort.
- Take decisions about taxes on short terms ¿pay or delay? ¿with guarantee or not? Social Security would be another matter.
- Customers and suppliers’ agreements analysis, handling all them with our major sensitivity and empathy, and focusing on those who are our “core business”, the strategic ones.
- Guarantee external funding, in terms considered convenient:
* National: financial entities with 80% bank guarantee for SME and self-employed and 60/70% for the rest, with guarantee managed by the Official Credit Institute (ICO)
* Catalonia regional: Avalis and Catalonian Finance Institute (ICF) 80/100% guarantee
* Local and Sectorial: check in your city council if there are any subsidy or assistance.
* Other means: other private funding’s, financial asset trading, shares management, etc…
About the bank guarantees, if the have already contact you or you have, we should pay attention to the following subjects:
* Terms offered
* Attention to the request of personal guarantees
* Which is the estimated time they say it would take to solve my situation
* Could I improve all previous terms with negotiation?
We should also think that we do not know the highest and precise offer they can propose or how they will proceed in each particular case, so it is very important to submit with all detail, all the documentation requested as well as the narrative. The STEPS we would propose for our internal development would be as follow:
It is necessary to follow all steps, obviously at the appropriate scale, no matter the size or volume of your business: self-employed, micro or medium business.
- Pre-insolvency institutes. As a last option, and attending to some requests we have received, if everything got complicated, which we expect not to happen, we remind you that the actual normative leaves us a last option, to attend to the pre-insolvency institutes, that means to submit the art. 5 bis from the Insolvency Law, you would have to report about the situation and start managing it on the most effective manner for all of yours.
However, we cannot forget that the first challenge is that your business counts on enough cash-flow to keep it working during the first mentioned steps, and this is what you should focus.
Cash-flow, business evolution, income and expenses on different scenarios, Social Security taxes and suppliers, all these require a global and special analysis, which will not be easy. With all due humility, but also with determination, we are following all legal and formal changes that are happening and that will come. Our tax, labour, audit, account, law and economy departments are now, between other matters, at your complete disposal to keep you informed.
Thank you for your attention and please, be safe.
María José Moragas · partner · legal dpt mj.moragas@pich.bnfix.com
Ester Brullet Humet · economist · ester.brullet@pich.bnfix.com
Sara Bueno · labor dpt · sara.bueno@pich.bnfix.com
BNFIX PICH tax · legal · audit
