MARCUS Paine, who has built the Scottish Borders-based Hutton Stone quarrying business, has highlighted the challenges of dealing with stalled cash flow for small and medium-sized enterprises such as his as they resume activity after lockdown.

Mr Paine was, like many business owners, forced to furlough staff and rely on government support when the UK moved to lockdown in March amid the coronavirus crisis.

The fifth generation of his family to work in the natural stone industry, Mr Paine has spent 26 years building up his firm, based at West Fishwick. Hutton Stone, a significant employer in the Borders with 40 staff, supplies sandstone masonry to the new-build and restoration construction sectors.

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Mr Paine, president of Construction Industry Coronavirus (CICV) Forum member The Stone Federation (GB), said: “Government support has been immense, but the banks have been very slow to the table for SMEs like us.” The CICV Forum was formed in March to bring together senior figures from trade and professional associations.

Mr Paine said: “When we re-start, let’s say for example on June 1, we’ll instantly see our fixed overhead shoot up to £125,000 a month, of which £85,000 represents our wage bill, plus HP (hire purchase), finance and ancillary costs of around £40,000. We’d then expect to cut and supply stone for a month and invoice our customers at the month-end. And if our customers are good payers, we would expect a payment from them at the end of the following month. However, that means we would have incurred at least £250,000 worth of costs before our best payers might pay.”

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Noting a "further month of delays in payment" could take the firm to around £370,000 of such costs, with additional quarrying expenses also incurred by this point, Mr Paine said: “That is a huge sum for any SME to finance in working capital and provides a sense of the level of focus we will need to apply to the issue of re-starting carefully and with great caution.”

He flagged the option of a staged return to work.