Helping you prosper

CBILS: Act now before it’s too late

14 August 2020

On 30 September 2020 the Coronavirus Business Interruption Loan Scheme (CBILS) is due to end. That’s only a few weeks away yet the economy is firmly in recession and for many of us, income generation is a fraction of what it was pre-COVID.

The Government cannot continue to prop up the economy indefinitely. The Job Retention Scheme is being phased out, the CBILS application deadline is looming and Bounce Back Loans will only be available until 4 November. Subject to there being a second spike and the Government needing to step in again, what does this mean for your business?

Anyone who believes we’ll bounce back quickly to pre-COVID trading levels is a braver person than I. There are green shoots of recovery but many businesses have stored up a lot of debt. With the delay in tax payments to HMRC including VAT, corporation tax, personal tax and PAYE as well as Bounce Back Loans, suppliers and even family debt, managing your cashflow is essential to plan what needs repaying in early 2021.

How are you going to repay it? Are your plans based on economic recovery and a V shaped recession? More importantly, what will happen to your business if recovery takes 12-24 months and what will your business look like at that point?

These are complex questions with a number of unknown variables and multiple solutions. If your analysis (i.e. cashflow forecasts) identifies a cash strain on the business in the next 12-24 months, I’d recommend you act now before CBILS comes to an end.  CBILS is a challenging arena but successful applications may be more attractive and more forthcoming than traditional commercial lending which will come back in to play post-CBILS.

If this is something you need or think you need, please feel free to call me. We can discuss your business plans and whether the need for finance is essential for your business survival. It’s worth noting:

  1. You are four times more likely to be successful when you engage with a professional to support you through the CBILS application process. There have been 110,000 applications for CBILS lending and 53,000 of those have been successful.
  2. We have access to 32 accredited lenders through our online platform with Capitalise. Many are alternative providers and require much less documentation than the High Street Banks. For example, NatWest require seven detailed documents and it’s a manual process, alternative lenders use technology to streamline that process and decisions are being made within 7 days of the application being submitted.
  3. We have supported many clients with successful applications through their existing banking relationship. Many banks are only accepting applications from existing clients.
  4. CBILS is government backed and the security you need to provide is much less than traditional commercial lending. Interest rates are generally very appealing and there are automatic capital payment holidays.
  5. CBILS products include loans, ID facilities, bridging facilities, revolving credit facilities and secured debt. You can secure CBILS lending through a combination of all of these facilities.
  6. CBILS is for loans of greater than £50,000. For less than £50,000 we recommend the Bounce Back Loan Scheme.

Time is of the essence, be realistic and don’t let this opportunity pass you by!

Should you have any questions on the above or need any support in applying for funding, please call Stuart Hutchison on 07590 440643 or email s.hutchison@uhy-uk.com.