Special Features

With CBILS coming to an end, the next three weeks will be vital for many SMEs

Andy Davies - White Oak
|
14th September 2020
Andy Davies White Oak
"That deadline should focus the mind of every broker, adviser and accountant because, for many of their small business clients, CBILS will be the lifeline that sees them through 2021."

The end of the Government’s popular “Eat Out To Help Out” scheme is a timely reminder that all good things must come to an end. The Government initiative saw 85,000 restaurants serve up 100 million meals in August. Those restauranteurs now have until the end of September to claim their share of the half a billion pounds the Government set aside to finance the scheme.

Though less eye-catching than Eat Out to Help Out, the Coronavirus Business Interruption Loan Scheme (CBILS) is a much bigger deal. Over 122,000 businesses have applied for their share of £13.6bn worth of lending made available to support SMEs. And, like Eat Out to Help Out, CBILS will come to an end – with 30th September being the last day for new applicants to get on board.

A challenging road ahead

That deadline should focus the mind of every broker, adviser and accountant because, for many of their small business clients, CBILS will be the lifeline that sees them through 2021. It is a year already filled with significant financial challenges.

For starters, there is the standard January ‘hangover’, a challenging time for any business with cash flow slowing as consumers tighten their belts after the Christmas splurge. But 2021 will have a set of unique challenges. Payment holidays will come to an end, double tax months will hit, and the arrival of deferred payments will rear their heads. For many SMEs, the start of 2021 will pose a series of financial hurdles that they will be required to jump over in order to survive.

Some are already planning ahead, with brokers and advisers using every tool available in their arsenal to futureproof their clients' businesses and ease the incoming pressure.

Where to find the funding

At this daunting time, it is easy for business owners to feel lost when it comes to securing financing. It is important that they have good people around them and partners who can help them shore up their finances quickly. With some banks unable or unwilling to lend, it can seem like an impossible task but there are alternative lenders out there who are able to be pragmatic and work with businesses to help secure their future.

Why CBILS

CBILS loans are designed to offer a vital lifeline to businesses across the UK as they grapple with the effects of the Covid-19 pandemic. In some cases, the funding is being used to adapt offices and workspaces to make them Covid-compliant, but in others, it is simply there to shore up cash flow. What CBILS funding can be used for is entirely flexible; the deadline for applications, on the other hand, is not. It ends on the 30th September.

At White Oak, we offer borrowing from £75,000 to £5 million over either 12 or 24 months, and the interest on a CBILSloan is covered by the Government for 12 months. Additionally, our customers are offered a payment holiday of up to 12 months, enabling them to recover from the crisis without the immediate financial burden of repayments.

There will undoubtedly be calls for the Government to extent the support it offers UK’s SMEs through CBILS, but as we have seen with Eat Out To Help Out, and in the words of the chancellor, there is only so much they can do. With no guarantee the scheme will be extended and a firm deadline in place, businesses and their advisers should move quickly to secure their financing for the challenging year to come.

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