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Funding insights: You have more options than you think

In his last column, Lending Partnerships Manager Mike Stanley urged businesses to review their finance facilities – as switching can save you serious money.

This week, he’s looking at your lending options again, and more specifically the second wave of financial hurdles business owners may now be facing. 

  • What if you were rejected for CBILS and took a lesser BBLS but now it’s too small?
  • What if you have a CBILS but that’s proving not enough now either?
  • What if you’ve been rejected for both but still desperately need cash?

Here, he looks at a range of different scenarios and shares solutions to help you. 

“It’s been eight years since lockdown, or at least that’s how it feels. I can’t imagine it has felt any shorter for business owners across the country. Each week seems to bring new challenges, whether it’s the enforcement of PPE or the government’s latest turnaround in reopening ‘high risk’ industries.

“Many businesses are still being supported by government funding such as the furlough scheme as well the Bounce Back Loan Scheme and CBILS.

“To date £33.7bn has been lent through the Bounce Back loans to over 1.1 million businesses. While £12.6bn has been lent via CBILS to over 57,000 companies. It’s great to see so many businesses have been able to take advantage of these schemes, but we do still hear that businesses are struggling because they fall into one of the following scenarios:

  • Have not received any government funding
  • Needed more than £50,000 but wasn’t approved for a CBILS loans
  • Needed less than £50,000 at the time but now needs more funding
  • Was approved for CBILS funding but now requires further funding

“Below I talk through the options you have for all these scenarios.

Have not received any government funding

“You may have applied early through your bank and been unsuccessful or sadly in some cases may just not have heard back from the lender.

“Since the launch of the scheme we have seen the number of accredited lenders grow from 40 to now over 100. The increase has seen a wide range of lenders and products added to the scheme. This means in theory there should be a lender that can now help in some capacity. Within the panel of accredited lenders will be finance providers with different risk appetites.

“So even if you have been trading for six months, there may now be lenders able to help. Also, depending on your business performance and profile there will be a range of options so it certainly is worth looking at the current available funding solutions.

Needed more than £50,000 but weren’t approved for a CBILS loan

“You may have felt backed into a corner at the time. You may have been declined for a CBILS so turned to the BBLS to get you through the uncertain time. You won’t be alone in this scenario.

“Many business owners will have run to this option as a lifeline. It has most likely kept things at bay but further funding to implement new measures, buy new stock and other spending needs could now be coming to the forefront, so you need to secure additional funding.

“Under the government guidelines you can only have one or the other when it comes to BBLS and CBILS. But you can move from one to the other. So you do have the option to use the new accredited lenders to apply for a CBILS loan and pay off your current BBLS.

Needed less than £50,000 at the time but now need more funding

“In short you are in a similar position to the above scenario. As I discussed you can move from a BBLS to a CBILS loan. Lenders will understand the reason for further funding based on the challenges facing current businesses, so don’t stop yourself from applying because you think it will look bad taking a less amount previously and now needing more.

“Businesses’ circumstances and situations change at the best of times and even more so now. So if you are needing further funding, do look at your options.

Were approved for CBILS funding but now require further funding

“You may think it’s a one off thing, but you can have more than one CBILS loan. So even if you have taken one already from your bank and now need some additional funding, the good news is you can approach another accredited lender to try and source those funds.

“There is no guarantee you will be approved as it will come down to the lenders assessment of affordability but it will mean you can ask the question and take on further funding.

“Other things to currently be aware of which you may not know.

“If you have a current loan with a lender from pre Covid-19, in some cases you will be able to refinance the loan you are on with that provider onto a CBILS loan. This will help ease the cash leaving your business with the monthly debt repayments. This doesn’t just apply to loans. If you have an invoice finance facility you can also switch or if you have finance on existing assets in the business you can refinance them to a CBILS facilities loan.

“The facilities are here to help so it is certainly worth looking into the benefits to see how it could help your business.

The end of CBILS?

“On September 30, CBLS support is set to end. A lot of the lenders I regularly speak to feel this may not be a hard deadline, but this is only a feeling and not a fact. What seems more likely is that there will be some changes to the scheme, for instance only paying interest for the first 12 months rather than no repayments within the first year, or no payments for six months rather than 12.

“What we do know is that right now the scheme is at its best, and there’s still time to apply. There is support out there. Use it while you can before it’s gone or it no longer benefits you.”

Find out more about how Fluidly can get you tailored, pre-qualified funding options in just 30 seconds.


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