Beyond CBILS: other sources of funding & support

If you’ve already pursued cost cutting, looked for alternative revenues, and sought agreement with your creditors to defer payments – then here’s a few thoughts on what else you should be aware of.

Don’t let the noise about CBILS distract you from the other support your bank might provide

Every little counts, so consider the following:

• Capital repayment holidays and interest roll-up on your existing loans and HP;
• Temporarily going over your overdraft limit. If agreed in advance with a story about which receipts will correct the excess, a bank will often be sympathetic;
• Relaxing lending formulas on working capital facilities, and temporarily waiving loan covenants;
• Additional credit card facilities;
• Any unused facilities, like letters of credit, guarantees or Forex hedging. Reducing limits on these facilities might give the bank flexibility to reallocate that credit to a higher overdraft or loan; and
• Can your bank release any security in full or in part to another lender? Its debenture might capture assets but they don’t place much reliance on such things as stock which might help you raise finance elsewhere

Think about what other lenders are available

Think beyond the high street banks. There are now a multitude of ‘Alternative Lenders’ and we hear that many of them have appetite to support businesses at the moment. It might be more expensive funding, but right now that’s a cost you may consider worth paying. There are lots of different flavours, debt funds, peer-to-peer lenders, asset-based lenders, and fintech businesses. It’s a bit of a maze, so take advice to point you in the right direction.

Be aware that your bank might move you to the “bad bank”

You might be moved to the “bad bank” or distressed lending department. These units earned a really bad reputation during the banking crash. If this happens take advice on how to communicate with them, and how to get back to the “good bank” as soon as you can.

Other government support for business

You’ll need to factor these into your plans alongside accessing debt finance, and they include:

• Coronavirus Job Retention Scheme (CJRS)
• Deferral of VAT and Self-Assessment payments
• Self-employment Income Support Scheme
• Statutory Sick Pay relief package for SMEs
• 12-month business rates holiday for retail, hospitality, leisure and nursery businesses
• Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
• Bounce Back loans scheme for qualifying businesses to borrow between £2,000 and £50,000 from accredited lenders
• Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
• HMRC Time To Pay Scheme
• The Future Fund between £125,000 and£5m provided the funds are 100% matched by investors

Get help

These are trying times, and more than ever it’s good to get input to help you access funding. You’re going to need a well presented story, scenario analysis, and stress tested forecasts. We’d be delighted to help with this whether it’s just to give you a second opinion on your forecast right through to co-authoring the pitch to the bank.