If you do not qualify for a government grant and cannot access (or afford) one of the loans partially underwritten by the government, there are a limited number of alternatives.
Do you have cash rich shareholders who will take more shares in your company or make a loan (possibly a convertible loan to allow for the pressure to be taken off, if the lock down continues for longer than we currently expect). Deals can be done around either of these options to give the supporting shareholder(s) a greater benefit from their support in the event that the lockdown is more prolonged or damaging than expected (or, less so). For example, a convertible loan could convert into 10% of the share capital of the company if the lockdown ends at the end of May, 15% if it extends to the end of June and 20% if it continues until the end of July.
Alternatively, you may own property assets on which in normal times you might raise a mortgage to address cash flow issues. We act for a number of bridging lenders who are still prepared to lend against such assets with sufficient equity. The loan to value ratio may be lower because they are using desktop valuations, but the speed at which such loans can be put in place is impressive and that may be crucial in the current crisis.
Finally, you may have assets which are currently idle which you could sell (and perhaps, leaseback). These could be plant and machinery or intellectual property (patents, trademarks, software, databases, copyright and others). There are buyers currently looking to pick up such assets at bargain prices. While you may not wish to sell, cash is king and retaining the asset until you call in the receivers will not be a victory.
We can assist with structuring and documenting these types of transactions. We may be able to assist with an introduction, depending upon the nature of the proposed deal.
For further advice on this topic, please contact Patrick Gilmour.