Call to make the most of CBILS funding before September deadline
The head of a corporate finance team which has helped clients secure £17m of emergency funding during the COVID-19 crisis today urged company bosses not to miss out as the deadline nears for applications by SMEs.
Nigel Barratt of HURST Corporate Finance said the Coronavirus Business Interruption Loan Scheme has proved a ‘lifesaver’ for many small- and medium-sized companies, with more than £13bn so far lent to around 60,000 firms nationwide.
Businesses can seek loans of up to £5m, with repayments spread over up to six years.
Companies apply to their bank for support and the Government underwrites 80% of the loan should the business fail and the lender be unable to recover its debt.
The deadline for applications for CBILS funding is September 30, and they can take up to four weeks to be processed.
The state-backed British Business Bank recently told lenders that they can take until the end of November to consider cases, but that the deadline for applications remains in force.
Nigel said: “The scheme has been a key element of government support for SMEs impacted by COVID-19.
“My team has supported clients in sectors such as travel, retail, construction and manufacturing, and the finance has been a real lifesaver for businesses whose revenue dropped dramatically, even to zero, and the outlook was incredibly uncertain.
“Our strategy has involved supporting clients in a variety of ways, from the preparation of detailed cash flow forecasts to helping prepare their applications or advising on the scheme’s requirements.”
He added: “Through our understanding of the CBILS scheme and knowledge of the banks’ requirements, we’ve helped ensure that clients receive their money quicker and with less hassle. We have found the banks to be very supportive.
“The creation of high-quality financial forecasting tools has been of additional benefit to clients in making decisions about all areas of their businesses, and to develop contingency plans.
“Although it may seem the worst is over, businesses need to consider how their cash position will be impacted if we have another lockdown, and what happens when furloughing ends in October.
“They should be making a realistic assessment about the next few years, and apply for a CBILS loan if they are likely to face ongoing financial challenges from COVID-19.
“With the scheme due to end soon, companies should not wait until the last minute to make applications, as we believe there is likely to be a significant increase in demand leading up to the deadline.
“Initially, businesses with high levels of accumulated losses were unable to access CBILS.
“However, following a change to the criteria, companies in this category with fewer than 50 staff and turnover of under £9m may now be eligible. Businesses in this position should reconsider applying.”
