Word on the street – 22nd May 2020

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Summing up the market from our various conversations with Banks, Finance Houses and Accountants

Latest Coronavirus Government Lending Figures

Scheme Value of facilities approved # of facilities approved Total number of applications
Bounce Back Loan Scheme (BBLS) £14.18bn 464,393 581,516
Coronavirus Business Interruption Loan Scheme (CBILS) £7.25bn 40,564 81,124
Coronavirus Large Business Interruption Loan Scheme (CLBILS) £0.59bn 86 496

*As per the latest official figures reported to the Treasury at close of play on 18th May

Looking at the above figures in more detail, we have seen the following differences from last weeks data:

Week on Week Comparison: Close of business 10th May – 17th May

Scheme Increase in applications since 10th May Increase in approved applications since 10th May Increase in value of approved applications since 10th May
Bounce Back Loan Scheme (BBLS) 217,870 196,220 £5.8 billion
Coronavirus Business Interruption Loan Scheme (CBILS) 16,593 4,645 £1.16 billion
Coronavirus Large Business Interruption Loan Scheme (CLBILS) 46 27 £0.23 billion

The latest official government figures continue to highlight the success of the Bounce Back Loan Scheme (BBLS), with a 73% increase on approved applications in just 7 days. By comparison, the CBILS scheme saw just a 12.93% increase in approved applications over the same period.

This certainly reflects the conversations we’ve had this week, and over the past few weeks previously, with the vast majority of the clients we have spoken to finding the BBLS applications far simpler with funds deposited within days in many cases. Compare that with CBILS applications, and the process can frequently take weeks.

There are currently 76 accredited CBILS lenders versus the 18 that have been accredited so far for the BBLS. If you would like a full list of approved lenders, please contact us and we will provide this for you. We’ll also keep you up to date on any newly approved lenders to the various schemes.

As always, if you are looking to make an application for government funding, always start with your own high street bank to see what the options are available to you. If you would like any assistance with funding or planning your own short or long term finance strategy, we’d be happy to help.

Away from the topic of government funding, the latest health check for jobs and growth from IHS Markit and the Chartered Institute of Procurement and Supply (Cips) suggested the economy has recovered somewhat this month. Despite this glimmer of encouragement however, the UKs economy is still very much on course for a slow rebound, as figures from the Purchasing Managers Index demonstrated. The PMI provides a snapshot of business activity using surveys compiled from company responses, and although this did rise from 13.8 to 28.9 this month, that figure still falls way short of the 50.0 mark that separates economic growth from contraction.

Somewhat worryingly, that figure of 28.9 was also lower than the worst point of the 2008 financial crisis. According to figures released by the ONS (Office for National Statistics) the sector that represents hotels, takeaways and restaurants reported the largest % of businesses re-starting trading in the two weeks to the start of May, followed by construction and manufacturing. As Britain slowly navigates its way out of the lockdown measures, IHS Markit forecasts GDP to fall by 12% in 2020, and the recovery will be measured in ‘years not months’. The worst appears to be over but there are most certainly challenging times ahead.

This week also saw businesses contacting us regarding the sale of their company, alongside further enquiries from interested parties for some of the businesses we currently have for sale. For many businesses the pandemic has given them a chance to look at their business models and diversify their offerings, with some choosing to grow through acquisition or simply expose themselves to different markets by acquiring a business with synergies to their own. Of course these businesses are in a healthy financial position and are able to pivot and re-align their strategies where others might not, but it shows the current state of the market needn’t be restrictive for all. Regardless of your own position, be it a business sale, a company acquisition or funding to improve cash-flow, we’re here to support and advise SMEs in any way we can.

This weeks advice tips include:

  • Focus on your customers – Many businesses fall into the trap of focusing their attention on their competitors and what they’re doing. What’s more important than ever now is the value you add to your own customer base. Many brands and businesses will be judged on the they handled themselves and their customers during this pandemic. Of course you need to adhere to the guidelines and remain operating safely, but if you’re able to go the extra mile it stays in the memory during times like these.
  • Identify your pivot point – Opportunities will arise from this period, be it through misfortunes within your sector or simply identifying new areas for your business to grow in to. What’s important is you that you are able to capitalise on these opportunities, both financially and operationally. Look at the challenges your customers are currently facing, or even the new challenges they are likely to experience as a result of this downturn and see where you can add value. Funding options are available, from government backed loan schemes to invoice finance and other finance products you can utilise to ensure you don’t miss out on the opportunities that present themselves.
  • We may be over the worst but there is a long, hard journey ahead for all of us. Undoubtedly the world we emerge into from these lockdown measures will be very different to the one we knew 12 weeks ago. Try to remain positive and make the tough decisions quickly. Have a plan and with the input of those trusted staff members within your circle, ensure that you implement it fully. Remember to lean on those within your network who’s advice and guidance you trust and most importantly, keep talking your problems through.
  • As always, its the same message from us each week; ensure you have a detailed picture of your business and how it has been affected by COVID-19 in place to ensure any funding application is processed quickly: Lending Criteria Tips
  • Good luck and stay safe, and do let us know if you would like help with any of the above.

    email us: info@thebusinessboard.co.uk
    call us: 0118 338 1818

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