As developments surrounding COVID-19 may affect your business (due to, for instance, a supply chain disruption, cancellations, etc.) and cash flow, we thought it could be useful to provide some tips to help guide you through these circumstances:
- Check whether you can restructure certain processes within the company and initiate the restructuring in a timely manner. Companies that go into a crisis leaner have a better chance of survival than those that only start to cut costs after the crisis hits.
- If there is less work for your employees, check whether you could qualify for a reduction in working time (werktijdverkorting). If you meet the requirements, the social security authorities will pay a portion of your employees' wages. More information can be found on the UWV's website (in Dutch only).
- Check the obligations provided for in your finance and credit facility documentation, as certain events could trigger a default. If you foresee that you will be unable to meet your finance obligations, it is best to contact the bank first rather than wait for it to come knocking on your door to find out what's going on.
- Check whether your contracts with suppliers are distress-resistant and review clauses related to, for example, possibilities to suspend payment, set off obligations and terminate the contract.
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