The Business Landscape – Post Covid-19

Whilst we remain firmly in the grip of the pandemic and enormous pressures are still evident in every aspect of life, the vaccine and its extremely efficient roll out brings thoughts of a post-pandemic world.

I’m not sure a pre Covid world will return, reminders and remnants of the virus will last for many years and behavioural changes, structural ones, will, I think be evident.

Its possible, I think, to look at the economy post Covid, without factoring in Brexit implications, the general flavour of the changes will not alter, Brexit or not.

By way of business, the next few years will be challenging, but for good, responsive, adaptable businesses potentially very rewarding.

In the short term businesses will be faced with repayments of Government backed facilities and there will be a dramatic rise in business failures, in all sizes of businesses, with the corresponding damage to future funding.

I expect HMRC to be very active and whilst sympathetic to businesses where Covid has impacted this will only be to a point.

Banks may find Government Guarantees (as they relate to CBILS and BBL) are not as solid as anticipated as the level of fraud will be higher than may have been expected; Banks will react in their usual way and consequently conventional bank funding in a post Covid environment may become limited.

This will offer scope for alternative financiers and I anticipate increased activity levels for the non-bank sector. This will bring opportunity aplenty for invoice and asset financiers, with a place at the table for peer to peer business lenders. (The latter must be clearer in advising retail lenders of their possible risk and must improve their credit policies)

For the economy as a whole I do not think the damage done will be as bad as some are predicting. The retail sector was going through seismic changes, regardless; the virus has simply accelerated this. Commercial property will likewise undergo a period of change, structural in its nature, not just via the upheaval on the High St but attributable as well to a shift in overall working practices crystallised by Covid-19. This has the capacity for far reaching implications in all sorts of areas, not the least of which being for pension funds.

The end of lockdown will be characterised by a period of, effectively, quantitative easing as cash saved, or at least not spent, during lockdowns, will enter the economic system. This will stimulate many, but not all, sectors. Certainly it seems safe to assume hospitality will benefit, although its equally safe to assume many outlets will not have survived.

I’m looking forward to a busy spring and beyond and to seeing businesses once again thrive.

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