How to Manage Your Credit in a Crisis

Categories: Budget, Business, Cash flow, Money

Managing your credit during a crisis – be it pandemic, flood, fire or significant downturn in business – is challenging.

This is not least because it takes time to build credit within any business. However, the thought of having to suddenly fight fires that threaten to wipe out your credit, or, worse, force you to rebuild it completely, might lead you to make rash decisions.

It’s OK to not know what to do or where to turn next. But we’d like to help, so we present our 5 tips on managing credit in a crisis.

  1. Seek support from the government (if available)

We’ll avoid using the ‘C’ word, but if March 2020 taught us anything, it’s that the government will step in if things get really bad.

If you’re facing a crisis that isn’t of your making, but which looks like it’ll severely impact your finances, your first step should always be to seek government help.

This doesn’t have to be in the form of loans, either. Get some guidance on your individual circumstances and while you’re reviewing any grants that might be available, look to the government for guidance on things like sick pay, tax, and insurance, too.

  1. Sure up your supply chain

One of the most effective ways to manage business credit is to ensure your supply chain is in good shape.

Ask yourself: do you have enough stock to continue meeting customer demand? If your business doesn’t offer tangible goods, do you have sufficient resources to carry on delivering your services?

If you’re a franchisee or operate under a parent company, it’s also important in times of crisis to keep an eye on their movements. Are you communicating regularly enough to ensure you know what their plans are to combat the crisis? Are they located somewhere that puts them at significant risk?

Dropping that line of communication now could leave you high and dry if things get worse.

  1. Yes, we’re going to say it…

Cash is king.


When things start to go wrong, it’s vital you keep an even closer eye on cash flow. For instance, do you need to chase those debtors you’ve been putting off? Are you sitting on invoices that should have already been sent?

It’s also important to think about customers who may be experiencing a similar crisis to you. Are they likely to head elsewhere and stop paying unless you offer them a lifeline in the form of a temporarily reduced fee? How long can you pause your services before running into difficulty? How else can you help them beyond your usual services?

  1. Check your contracts and processes

When a crisis strikes, existing processes and contractual terms may need to change.

For example, you may need to relax certain rules around customer payments and cancellations in order to maintain their long-term business. Equally, your Ts&Cs might need to be reviewed and amended to reflect the current situation if they’re suddenly out of context.

Check industry regulations, too. In times of crisis, they’re often modified or added to, and it’s important you keep up to speed with them.

  1. Think about your people

No business owner wants their staff to suffer if there’s a crisis taking place.

This is why it’s important to think carefully about each and every team member. Who is most at risk during the crisis? How can you help them retain their job, even if it means temporarily reducing their hours?

It’s at times like this that you also need to revisit the risk assessments and disaster recovery plans you created some time ago. You created them for now, so make sure you put them to effective use.

Still stuck? We’re here to help

It’s important to reiterate that it’s completely understandable if you don’t know what to do when a crisis hits your business.

Even if you’re still scratching your head after reading the tips above, the Chandlers team can help. Get in touch, tell us your troubles and we’ll do our best to support you.