Small businesses: dealing with your landlord and suppliers

For many small businesses, the key to getting through the Covid-19 pandemic may be negotiating a sympathetic arrangement with the landlord or key suppliers. Are they prepared to offer rent or payment holidays during the height of the crisis to help you with short-term cash-flow pressures?

In practice, it will be in the interests of many landlords and suppliers to help rather than lose tenants and customers altogether. But to negotiate the right deal, you need to approach the situation carefully and sensitively.

Start with a clear plan. What do you need from your landlord and for how long do you need this support? Strike a balance between asking for all the help you will realistically need – going back later to ask for further forbearance may get a negative reaction – and pushing too hard. Landlords and suppliers will have their own pressures.

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Talk to your landlord and suppliers as soon as you can, ideally before you miss any payments. The later you leave it, the weaker your negotiating position will be. Set out the benefits of offering your business help: where possible, remind landlords and suppliers of your good payment history and strong credit score and provide detail of your longer-term prospects. Make the point that others in your sector – potentially alternative tenants and customers – will be in the same boat as you. Where you can pay at least something, offer to do so. This will often be better received than a request for a complete payments holiday. It also means the landlord or supplier will be better off with you than with no customer or tenant at all.

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David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.