Lisa HoggView Profile
Many business sectors have been hit by the coronavirus (COVID-19) and require help, but the events sector is a unique case. With social distancing enforced and the banning of gatherings of more than two people, the events sector has been effectively closed overnight.
A sector wiped out overnight
As mentioned, the events sector has been heavily impacted by the implementation of strict social distancing rules. With the government’s current advice to stay at home for all but essential travel, the event’s sector has almost no ability to operate. When you consider all the requirements for events such as conferences, conventions and concerts to take place, there could be a lot of businesses finding themselves with holes in their cash flow. Event spaces, hotel chains, caterers and utility companies are just a few examples.
Calum Di Lieto, editor of the magazine Conference & Incentive Travel C&IT, predicts things will get harder for companies involved in event management:
“Hotels, venues, and event agencies are going to struggle in the short to medium-term. SMEs particularly are going to have cash flow problems that even government aid may not be able to solve.”
What help is available?
While not much can be done to restart the events sector until social distancing rules are relaxed, there is support for businesses who might have felt the effects of social distancing. Which option is most appropriate for each business will depend on that business’ circumstances.
The go-to for many businesses will be the government’s support schemes, of which there are several. The Coronavirus Business Interruption Loan Scheme (CBILS) allows businesses which were solvent before the pandemic, access to loans and finance options via accredited lenders and banks. Businesses must meet set eligibility criteria to qualify for the scheme.
Even if your business isn’t approved for CBILS, you can still apply for commercial finance outside of the scheme. Commercial finance is an umbrella term for several finance options, including re-financing, asset finance, bridging loans and factoring. Speak to a finance broker to discuss your options and find the best solution for your circumstances.
If the company’s troubles are deeper-rooted, or financial options won’t be enough to save it, you may have to think about applying for an insolvency procedure. The specifics and consequences for your business can vary depending on which is best suited for you. One of the most popular is a Company Voluntary Arrangement (CVA); a monthly repayment agreement between your company and its creditors, where a portion of the debt is repaid over five years. Administration involves a third-party taking control of the company to make the necessary changes.
If closing the company is the best option, a Creditors Voluntary Liquidation (CVL) allows you to close the company through an orderly process and means creditors may get a more substantial return than from winding-up the company.
A possible future?
While the sector’s immediate prospects appear bleak, those involved have found ways to partially substitute the problem. Video conference calls have taken the place of group meetings for the time being, along with the rise of ‘virtual events.’ While these are a necessity now, going forward, they could become more commonplace. Virtual events reduce the need for travel and accommodation costs. They’re also more environmentally friendly and don’t require the hiring of a large enough venue to accommodate everyone. While the level of social interaction isn’t quite the same as physically meeting others, it could be what keeps the events industry alive until the pandemic eases.
The events sector, and the associated industries have taken a hammering from the coronavirus pandemic; with many events being cancelled to adhere to social distancing. With new technology, the sector has adapted to these times, although it’s not fully replicated conditions before the pandemic, it has allowed businesses to continue working.
If businesses associated with the events sector find themselves struggling financially because of the coronavirus, they can apply for the Coronavirus Business Interruption Loan Scheme (CBILS). Alternatively, commercial finance is available, as are insolvency procedures for deeper-rooted problems.