Help your cashflow with the extension of the Coronavirus Business Interruption Loan Scheme

Ongoing cashflow and funding is a topic at the forefront of business owners, accountants and auditors’ minds alike.

Monitoring of actual results and forecasting future cash requirements is of the utmost importance.  These forecasts can be challenging at the best of times but even more so currently given the global pandemic.

At the time of writing we are just coming out of a 4-week national lockdown in England.  In the North East region, we are moving into the Tier 3 restrictions.  Therefore, although non-essential shops are able to re-open a lot of businesses will find themselves re-assessing their options.

With all the changes to date and those still to come now would seem a good time to review forecasting and cash requirements anew.

The Coronavirus Business Interruption Loan Scheme (CBILS) had been due to end on 30 November 2020 and many businesses have already taken advantage of the scheme.

However, following the announcement of the second lockdown the Chancellor provided a further extension of CBILS.  As the deadline to apply has now moved to the 31st January 2021, we take a look at what you need to know about the scheme before you lose the opportunity to take advantage of it.

The CBILS is provided through the British Business Bank and a group of accredited providers.  It’s primarily focused on providing financial support to SMEs who have experienced lost revenue and cash flow disruptions as a result of Coronavirus.

The scheme helps small and medium-sized businesses to access loans and other kinds of finance up to £5 million.

The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months. Businesses can apply for a loan of up to 25% of their annual turnover.

There are 117 lenders participating in the scheme including all the main retail banks.

We are working in collaboration with RTC to provide funding support to our clients, which reduces the cost of our advice to clients.  If you are interested please do get in touch with your usual RG contact and they will be able to give you advice on the best way forward.

In general terms you’ll need to tell the lender:

  • the amount you’d like to borrow
  • what the money is for
  • how long you’d like to pay it back

You’ll need to provide documents that show you can afford to repay the loan.

These may include:

  • management accounts
  • cash flow forecast
  • business plan
  • historic accounts
  • details of assets

The documents required will vary from lender to lender and depend on how much you’re asking for. If you’re asking your existing lender for a small loan, the process may be automated and not require all of the documents.

The lender will check that the loan is:

  • for a suitable business purpose
  • affordable for you
  • the right type of finance for your needs

The lender will decide whether to offer you a loan or another type of finance and you’ll be responsible for repaying 100% of the amount borrowed.

The RG team are available to assist with any questions you may have via telephone, e-mail or video call and we will look forward to face to face discussions in 2021.

Finally, please do keep an eye on the Coronavirus hub on our website which is kept up to date with all the latest developments.

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