If your business does not believe that it will be able to meet its covenants set out in its finance documentation (due to impaired financial performance or other disruption to normal trading arrangements caused by the COVID-19 pandemic), then it is vital that you speak to your bank as early as possible. Banks will be expecting these types of conversation and you will need to think about whether your require covenant waivers and/or payment holidays.
All indications are that banks will be supportive, but you will of course have to provide supporting information and you should think about putting together a business plan so as to how how you plan to trade through these turbulent times.
Our page “Coronavirus – Legal advice and guidance” has more information on issues arising due to the Coronavirus pandemic. Please have a look from time to time for the latest updates. If you have an issue not covered on this page please do email James McNeil.