WORKING THROUGH THE COVID 19 FINANCIAL CRISIS
This is an unprecedented situation for the travel and tourism industry.
The question we all seek the answer to is "when will business return to normal?"
Will it be in 6 months, 9 months, 12 months or will there be a new normal.
Will they find a cure for Covid-19 - yes?
How soon will this be?
We don't know.
So right now, we need to prepare for the worst and hopefully things will not get that bad.
Being financially prepared should include the following:
1. Claim the government subsidy.
2. Get your accounts up to date.
3. Review all costs and reduce where you can.
4. Prepare a budget / cash flow. At this time this should probably be for 2 years.
You can use the model on our web site - under Learning Hub.
When you have prepared the budget and cash flow you will be able to review your options.
Depending upon the severity of the downturn upon your business they may be:
1 Shut down your business.
2 Hibernate for 6 to 12 months with no staff.
3 Hibernate for 6 to 12 months with minimal staff.
4 Work Independently.
Depending upon your chosen option you may need to access the government guaranteed loan scheme.
This is available through your bank and will involve providing all the usual information required by the bank for lending.
A Statement of Your Financial Position – Assets and Liabilities and Income and Expenditure.
Current Financial Accounts for your business.
Listing of Debtors and Creditors.
Budget Cash Flow for up to 3 years.
At present the banks don’t seem to have finalised their offering for the Government Backed Loans. So, if you are sure about what you are doing and you need some funding start talking to the bank soon.
Additional funding will add to the costs of running your business, so should be considered carefully and factored into your business plans. As part of updating your plans consider:
The expected financial impacts on the business over the next six months and what a return to more normal business might look like over 2-3 years.
Assumptions made to estimate these impacts.
All additional measures available to the business, including Government support reduced operating expenses (for example, reduced or deferred costs, distribution) and any additional sources of income and/or capital.
Is an existing ANZ NZ customer.
Had turnover of between NZD250,000 and NZD80,000,0000 at the end of its 2019 financial year.
Is a New Zealand-based business (the Government may define this – please contact us if you’re unsure whether this applies to you).
Isn’t engaged, as material part of its business, in an excluded activity (see list).
In assessing the lending, ANZ will need to look at the impact of COVID-19 on your business operations, its trading position before the COVID-19 crisis and your plan for when the country returns to something resembling normality.
Can only be used to meet urgent liquidity or bridging financing needs due to disruption COVID-19 has caused your business and not for any excluded purpose.
Cannot be drawn or accessed before using any existing ANZ facilities (other than a credit card, trade finance loan, or other loan that we let you know is excluded)