Don't tie it up

What’s the key asset that can help businesses survive and thrive in 2021? Steve Cowdery, Head of Key Accounts at CBPF, fills us in on why the coming months are all about cash flow

“The past year has seen brokers and clients alike face unprecedented changes and challenges, and things aren’t going to get any easier for businesses as they negotiate the next six months and beyond. Good cashflow is going to be key.

“Even those that have done better than others during the pandemic – such as construction, digital businesses and couriers – still need to maximise opportunities for expansion and growth. Cash flow is important to them too.

“So why tie it up?

“Brokers play an important role in all this. We know how hard brokers have worked to help their clients through difficult times. Their support helps businesses maintain appropriate levels of cover while freeing up cash to allow flexibility to face whatever comes next.

“Brokers have acted proactively to offer clients practical solutions – agreeing risk management strategies, engaging earlier with clients and insurers on renewal processes, and offering premium finance solutions to guarantee clients the right cover while helping them spread the cost and maintain good cash flow.

“At Close, it’s our job to give brokers the confidence to help their clients free up that cash when the future remains so uncertain.

“By preserving existing lines of credit, customers can leave their cash or their overdraft free to be invested into their business as working capital. Even as we finally, hopefully emerge from lockdown, businesses will still face periods of unexpected, un-budgeted-for expenditure.

“Without the right empathetic support, there’s a real danger that many businesses may look to reduce their cover in a hardening market – which could leave them unprotected and result in an even riskier future.

“That’s why premium finance can be such a boon to businesses and brokers alike. Off-balance-sheet lending and a fixed interest rate can give customers the reassurance to be able to budget confidently for the duration of the policy term.  They can also claim corporation tax relief on the premium finance charge.

“Meanwhile, at Close Brothers we can offer access to our other expert areas, such as asset management and asset finance. We also offer complimentary broker training to help sell in a hard market, while tools such as our Payment Services system reduce wasteful admin time.

“We have to hope that the fantastic success of the UK vaccination programme will signal a return soon to some sort of personal and business normal for all of us.

“But we can expect to feel the effects of the pandemic on our lives and the insurance industry for a long time to come.

“Regulation will continue to impact the way we trade, M&A activity will continue to increase, and the added uncertainty of what Brexit really means for all UK businesses isn’t going to disappear fast.

“All of this points to a continuation of the hardening market. – and brings us back to where we started – appreciating that for the foreseeable future businesses will need the financial flexibility of cash flow to see them through.

“There will be a growing demand for premium finance in the months ahead, and businesses and brokers need to be confident they have the right product. We can help.”