As businesses are returning to some sort of normality, many are finding that their cash resources have been depleted by several fallow months. Whilst their business is fundamentally viable they could incur reopening costs (expected to average £22k), or be heading into a period where sales are slowly returning to pre-Covid levels but there are still many mouths to feed – especially when the furlough scheme comes to an end.
For some a Bounce Back Loan has provided the buffer needed to secure the future of the business but these are limited at £50,000 and what if that isn’t enough?
The next level up is the Coronavirus Business Interruption Loan Scheme (CBILS). Businesses can raise a loan up to 25% of their 2019 turnover from £50,000+. There is no fee to pay and no repayments for the first twelve months, with the British Business Bank paying the interest. There are no personal guarantees required and the BBB guarantees 80% of the loan (although the business is liable for the repayments in the first instance).
If you have already applied via your clearing bank and have been rejected or are still waiting for an offer, Start Point Finance can apply to an alternative lender, offering similarly competitive interest rates and turnaround time from application to offer in under 7 days. Companies who have already taken a bounce back loan via their bank but need more funds can convert it into the CBILS with the added benefit of restarting the 12 month payment holiday.
The stipulations to apply are:
- Must be UK based
- 2 years minimum trading
- Must have been negatively impacted by Covid
- Must have been viable pre-Covid (not neccesarily positive balance sheet)
- Can borrow maximum 25% of 2019 turnover
- Minimum 2019 turnover £200,000
The deadline for application is the 30th September. Although there is a possibility this will be extended there is no guarantee so it is worth applying soon.
If you are interested in a CBILS loan email us at toby@startpointfinance.co.uk or speak to your usual broker.