Has Covid affected the health of your Balance Sheet?


At my age, I have benefitted from Double vaccinations, a Winter Flu jab and just last week my Booster Jab. You also may have been vaccinated against the personal risk of Covid, but what has it done to the health of your business?

At MAP it is our purpose to support businesses and their owners to be more financially mature.

This means more than just understanding the P+L. It includes how others will see you and therefore the health of your Balance Sheet. We understand that to many business owners measuring profits matters, and it does, but not in isolation. It is also important to recognise that the basic valuation tool for your business is your balance sheet.

That valuation is not just for use in a sale, balance sheet values are also used in lending criteria for example.

The balance sheet details what is referred to as the “book value” of any organisation, as calculated by subtracting all of the company’s liabilities from its total assets.

Balance Sheets have been there for ever, so why does this matter now more than before?


Over the past 18 months in the UK, a wide range of businesses have been supported by several government initiatives designed to stabilise and support businesses during the height of the Covid-19 pandemic.

Much of the support available to these businesses has been through various loan schemes, which are known technically as “debt products”.

These included:

  • Coronavirus Business Interruption Loan Scheme (CBILS): allowing businesses to access financial support up to £5m. The government guaranteed 80% of the finance to the lender and pays interest and any fees for the first 12 months.
  • Bounce Back Loan Scheme (BBLS): the biggest advantage of the BBLS was that it did not require repayments during the first 12 months but allowed businesses to access financial help quickly during the pandemic. The scheme helped small and medium-sized businesses to borrow between £2,000 and up to 25% of their turnover, with the maximum loan being £50,000


As well as being able to access these government loan schemes, many businesses also took advantage of the furlough scheme which meant employers could reduce the risk of redundancies, retain talent and provide a route to work for employees post pandemic. In addition to the official schemes, many businesses also undertook private, but formal, arrangements with the likes of Landlords for a reduced rent or a rent-free period or extended payment arrangements with HMRC.

Whilst these options were vital to many, the consequence of any loan scheme, debt-based, or deferral product, is that they ultimately lead to an increase in the level of liabilities on the balance sheets of your business, and maybe an imbalance?

Trading forecasts for many are still uncertain but the clock is ticking on any payment holiday that you may have in place.

To make sure that any short-term imbalance, or hiccup, on your balance sheet doesn’t become next year’s number one survival issue, then talk to one of our Finance Partners about getting a long-term cash flow forecast and balance sheet review conducted.

Stuart Brown

Non Executive Director