CBILS under the spotlight as just 2000 firms in the UK granted funding

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The Coronavirus Business Interruption Loan Scheme (CBILS) has to date funded 2022 UK SMEs since it’s introduction on the 23rd March, equating to just 0.65% of applications so far.

These figures, compiled by industry body UK Finance, make for concerning reading given the fact there are circa 6 million SMEs in the UK. In addition, according to recent reports from The British Chamber of Commerce, 16% of those companies had less than a months worth of cash in reserves.

Initially, CBILS was launched with the intention of funding small UK businesses with a turnover of up to £45 million via a network of 40 approved lenders. At the time of announcement, 80 percent of these loans were guaranteed by the government. In the days and weeks since, small business owners were finding the strict and stringent requirements put on funding applications by the government and the banks made successful applications almost impossible.

On Thursday 2nd April, Chancellor Rishi Sunak announced major changes to the scheme he introduced in March, in order to relax some of the more stringent funding restrictions in place and release much needed funds to struggling businesses. Scrapping the CBILS requirement that directors provide PG’s on loans and have been turned down for commercial lending prior to funding applications was a huge step in the right direction.

As a result, in the coming weeks we should see a spike in the successful funding application data however there are still a number of bottlenecks. One key concern however is the time it takes to secure funding and looking at the stats from The BCC, a number of businesses simply cannot survive for much longer without funding.

As always when seeking funding for your business your first port of call should always be your high street bank. Yes the requirements are stricter than many of the alternatives however they still offer the best rates on the market. Its worth noting here, a struggling business applying to their bank for an emergency loan is 8 times more likely to be rejected than approved for funding, according to the poll carried out by The BCC. If your situation does meet the rigorous criteria, this is almost certainly your best option.

Beyond the banks, independent finance houses are still lending and although the due diligence has increased, a successful application will see a facility on funds within days. We have compiled a list of lending criteria tips for you here to ensure you have everything in place prior to your application, so the process moves as quickly as possible:

Lending Criteria Tips

Throughout the COVID 19 pandemic, we have been working with a number of businesses to ensure they have a robust financial strategy in place and assist with funding applications. Our network of approved funding partners offer flexible and competitive funding solutions that can provide a crucial cash injection to sustain your business and safeguard it’s future.

If you are interested in finding out more about our finance options and funding solutions, email us at: info@thebusinessboard.co.uk or call our office on 0118 338 1818.

We look forward to speaking with you and of course, stay safe.

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