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How well has Sunak done?

Rangewell’s analysis of economic data during the Coronavirus pandemic to assess the impact of the Government Support packages Summary  There is significant evidence to show that UK businesses were on ‘v’ shaped recovery courses when restrictions were eased in June. Since September, when tighter restrictions were implemented, this recovery has slowed. As we exit the firebreaks and lockdowns, there are signs that the recovery from the Government's restrictions on trade will be faster than that of the spring closures, partly as fewer firms have been affected by the containment but also signs that the Government support measures have worked. We could be on course for a wonky ‘w’ shaped recovery.  All industries saw a dramatic drop in GDP at the start of the pandemic. Some sectors struggled to return to their February levels, while others saw their output bounce back to their pre-March levels by June.  As restrictions came into force throughout by the start of November, the percentage of businesses experiencing a decrease in turnover increased sharply. 50% of businesses experienced a lower turnover to what is normally expected for November.  If you compare June's and October’s drop in expected turnover, it had decreased from 65% in June to just 45% by the beginning of October.  There are signs that businesses are adapting. The proportion of online spending peaked during lockdown. Online sales rose across all sectors when compared with the same time a year earlier.  The proportion of online sales was at 27.5% of overall sales in September, compared with the 20.1% reported in February. Food stores nearly doubled their online proportions from February to September. All UK regions increased their online job adverts in November, with Wales showing the largest increase from 77% to 82% of its 2019 average. This coincides with the end of “firebreak” restrictions in Wales. The highest volume of job adverts compared with its 2019 average was in the East Midlands, at 89%. The government-guaranteed Covid business support loan schemes have delivered £65.5bn of finance businesses to 1.4 million UK businesses.  This includes 1.3 million of Bounce Back Loans worth £42.2billion, just under 78k loans worth £18.5billion through the Coronavirus Business Interruption Loan Scheme and 658 loans worth £4.8billion through the Coronavirus Large Business Interruption Loan Scheme. The application success rate remains high with Bounce Back Loans coming out on top with a 79% application success rate, 45% for Coronavirus Business Interruption Loan Scheme, while there is a 62% success rate for the Coronavirus Large Business Interruption Loan Scheme. The Devolved Covid Small Business Grants have been popular within the Manufacturing, Construction, Retail, Hospitality and the Arts sectors, while the Devolved Sector-Specific Grants have been utilised by the Transport and Hospitality sectors throughout the UK. By mid-November, those businesses who had not permanently ceased trading saw 60% of the workforce working at their normal place of work. The Arts and Hospitality sectors had the highest proportions of their workforce on partial or full furlough leave under the terms of the UK government's Coronavirus Job Retention Scheme. While heavy industries such as Manufacturing and Construction had the lowest amount of workforce still on either partial or full furlough leave.  The Government's Kickstart Job Scheme for young people has not been widely popular with businesses, with only 2% saying they will or have made use of the Scheme. The Construction industry has adopted the Kickstart Job Scheme more than any other sector but it has only been used by 3% of Construction firms. The Job Retention Bonus has not been as successful as the Treasury might have expected but the silver lining is that 80% of businesses reported they have not/or intend to use the Job Retention Bonus as they do not have furloughed employees.  Unfortunately, 14% of Hospitality firms say that their furloughed workers will be made redundant by the end of the year.  Overview of business performance  All industries saw a dramatic drop in GDP at the start of the pandemic. Some sectors struggled to return to their February levels, while others saw their output bounce back to the levels they were at in February by June.  Monthly output as a proportion of February 2020 output; February 2020 output = 100%. Number of people with at least one positive COVID-19 test result (either lab-reported or lateral flow device), by specimen date. Source: Office for National Statistics, GDP monthly estimate: PHE Weekly Cases data, people tested positive, UK Whole. By the start of November, 50% of businesses experienced a lower turnover to what is normally expected for this time of year. If you compare June's and October’s drop in expected turnover, it had decreased from 65% in June to just 45% by the beginning of October.  However, as local and national restrictions came into force throughout October, by the start of November, the percentage of businesses experiencing a decrease in turnover increased sharply. Source: Office for National Statistics, Business Impact of COVID-19 Survey (BICS)  The turnover and profitability data is significant as the ONS’s fortnightly profitability & turnover estimates seem to be following the same trends as the UK monthly GDP estimates. This is despite the fact that fortnightly profitability & turnover estimates are published much earlier than the official monthly GDP estimates. Source: Office for National Statistics, Business Impact of COVID-19 Survey (BICS)  All UK regions increased their online job adverts in November, with Wales showing the largest increase from 77% to 82% of its 2019 average. This coincides with the end of “firebreak” restrictions in Wales.  Northern Ireland, where recently “circuit breaker” restrictions have been extended, was the region with the smallest weekly increase in the volume of adverts despite it seeing its first increase in three weeks.  London also had its first weekly increase in job adverts in three weeks. However, it remains the region with the lowest volume of job adverts compared with its 2019 average, at 55%.  The highest volume of job adverts compared with its 2019 average was in the East Midlands, at 89%. Source: Office for National Statistics, Coronavirus and the latest indicators for the UK economy and society The proportion of online spending peaked during lockdown. Online sales rose across all sectors when compared with the same time a year earlier.  The proportion of online sales was at 27.5% in September, compared with 20.1% reported in February. The proportion of online sales increased across all sectors with food stores nearly doubling their online proportions from 5.4% in February to 10.4% in September. Department stores were the only stores to increase sales in September when compared with August. Feedback to the ONS from these stores stated that the online pre-ordering of a new range of gaming products helped boost their sales. Government financial support The government-guaranteed Covid business support loan schemes have delivered £65.5bn of finance to 1.4 million UK businesses.  This includes 1.3 million Bounce Back Loans worth £42.2billion, just under 78k loans worth £18.5billion through the Coronavirus Business Interruption Loan Scheme and 658 loans worth £4.8billion through the Coronavirus Large Business Interruption Loan Scheme. In addition, the Future Fund has seen £875.8m worth of convertible loans approved for 874 companies. The application success rate remains high with Bounce Back Loans coming out on top with a 79% application success rate, 45% for Coronavirus Business Interruption Loan Scheme, while there is a 62% success rate for the Coronavirus Large Business Interruption Loan Scheme. Source: Office for National Statistics, Business Impact of COVID-19 Survey (BICS)  The Office of National Statistics reports that Manufacturing, Construction and Hospitality have been the most active sectors for the loan schemes, with 36%, 42% and 34% respectively reserving a Government-guaranteed loan. Source: Office for National Statistics, Business Impact of COVID-19 Survey (BICS)  Covid Support Grants is a Devolved support package. The small business grant has been popular with the Manufacturing, Construction, Retail, Hospitality and the Arts sectors throughout the UK, while sector-specific grants have been utilised by the Transport and Hospitality sectors.  Source: Office for National Statistics, Business Impact of COVID-19 Survey (BICS)  Employment support By mid-November, those businesses who had not permanently ceased trading saw 60% of the workforce working at their normal place of work. The Arts and Hospitality sectors had the highest proportions of their workforce on partial or full furlough leave under the terms of the UK government's Coronavirus Job Retention Scheme, at 34% and 22% respectively, while over 98% of heavy industries, such as Manufacturing and Construction, had the lowest proportion of their workforce on either partial or full furlough leave.  Source: Office for National Statistics, Business Impact of COVID-19 Survey (BICS)  The Government's employment incentive schemes have not been widely popular with businesses, with only 29% using or intending to use the Job Retention Bonus and as low as 2% who intend to or have made use of the Kickstart Job Scheme.  Source: Office for National Statistics, Business Impact of COVID-19 Survey (BICS)  The Construction industry has adopted the Kickstart Job Scheme more than any other sector, but only by 3% of firms. The Job Retention Bonus has been most popular within the Hospitality sector with 47% using or intending to use the scheme.  On why firms are not using the Job Retention Bonus, 80% reported they did/do not have furloughed employees, while 14% of Hospitality firms say that their furloughed workers will be made redundant before 2021. Source: Office for National Statistics, Business Impact of COVID-19 Survey (BICS) 

Case Study: Cutting the cost of refinance for a doctors' surgery

Cutting the cost of finance - with £4.5 million at just 1.4% As a doctor, you operate a practice that helps patients and benefits the community - but don't forget that you are also operating a business, and getting the right financial solutions is essential for your financial future. At Rangewell, we help practitioners just like you, throughout the medical profession find solutions to their funding needs - and we recently set up funding to refinance £4.5 million of loans. It was a complicated funding package. Our clients were a partnership which operated as a group across three freehold surgeries in South-East England. They had taken out a series of interest-only loans to acquire the properties they worked from, and with the terms of all these loans coming up over the next 18 months, they were keen to find new financial arrangements. But the position was complicated by some other factors: Two of the existing partners of the 7-partner strong group were retiring, with two new doctors ready to join.  All three practices in the group required some refurbishment and the business was seeking an additional £400,000 of funding. The partners had an interest-only deal on their finance and were keen to continue to borrow on that basis. Why interest-only deals are the funding choice for medical practices Most businesses will purchase their premises with a repayment and interest loan which, after a term of 20 or 25 years, will allow them to own the property outright. For doctors buying their surgery, this is less attractive for two reasons. Firstly, it will be considerably more expensive, and the higher monthly expense will mean a reduced income for the partners. The second is that, when it becomes time for a partner to retire, the extra cost commitment of a repayment loan will make the partnership less attractive to an incoming partner - meaning that it may be less easy to attract an incoming doctor to buy out the retiring partner, or to only be able to do so on reduced terms. The ability to reduce outgoings both for existing partners and for potential partners means that the lower costs of an interest-only loan are preferred. The problem the partners faced The current problem with interest-only loans is that, when starting to look at ways to replace existing funding arrangements, lenders have become reluctant to offer interest-only arrangements in the current, unsettled climate. Those that will are likely to reserve funding for existing clients only - making it more difficult to shop around for a better deal. When the partners approached their bank, they were told that lower interest rates might be available - but that because of the size of the borrowing, the extra sum required and the changes in the partner line-up, interest-only funding was no longer being offered. The new loans would need to be on an interest and repayment basis which, despite the fall in rates since the loans were first taken out, their repayments would actually go up rather than down. Rather than spend valuable time calling around, they realised that calling in specialist help was necessary, and contacted us at Rangewell. Do you need help with your funding challenges? Contact our Funding Team today for innovative answers when others say 'no' How we found a solution We knew that in the current climate, large interest-only loans can be more difficult to arrange - the low interest rates would make this kind of lending very attractive for borrowers - but less than cost-effective for lenders.  However, the status of our clients as medical professionals would make it easier to get the loan required - and the fact that the client had left us plenty of time to arrange the lending would help us negotiate the most favourable rates by talking to a number of banks. We were able to do this because of three great strengths that we can offer.  We are independent, working with lenders across the entire lending market to ensure that we can find the most cost-effective rates in the entire market We have built up close personal contacts with many lenders, allowing us to negotiate where other lending experts are forced to accept standard rates We have experts in funding for the medical profession - we can put our expertise to work to find solutions for you. Like the clients had found themselves, it initially proved difficult to find a lender prepared to offer the total £4.5 million required on an interest-only basis. However, we persisted and were able to create interest in the loan from a number of lenders who recognised that the nature of the group practice offered real security - and that the introduction coming from the Rangewell team was further evidence of the viability of the deal. With multiple offers on the table, we were able to negotiate and ensure that our client could have all the funding they needed from a lender that was most eager to help. The funding the Rangewell experts arranged. £4500000 over 20 years on an interest-only basis 1.4% above base rate The partners' reaction “We were delighted by the deal Rangewell arranged for us. We wanted to take advantage of the lower rates now available, we needed additional funding for our development plans, and things would have been difficult if we had stayed with our existing lender - even if they had been prepared to offer us the extra cash we needed. Despite rates being now generally much lower than when we took out funding years ago, having to include repayments in the monthly charge would have left us very much worse off. This way, we’ve been able to keep on the interest-only basis we wanted, up our borrowing and still reduce our monthly outgoings.” At Rangewell, we can frequently help find businesses - and especially practices in the medical and related sectors - find answers to funding challenges, when going direct to lenders will not. If you need funding, call us now on 020 3637 4150 or email [email protected] - our experts are ready to help you with your medical finance questions.

CBILS Success Story: a loan for a business with too many commitments

Funding a lifeline for a linen supplier TL:DR: When a specialist linen supplier was struggling to keep their business afloat, their bank rejected an application for CBILS funding because the business was already high geared. We found a way to provide £250,000 with CBILS funding.  Urgent update: The government has announced an extension to the deadline for CBILS applications, which will now remain open until January 31st. Don’t miss out on the government-backed funding you must have - call us now. Our client was a business providing linen - tablecloths and napkins - to restaurants, hotels and events caterers. The lockdown came as a disaster for their business - because although they were allowed to trade, their customers were not. “Covid meant that overnight we went from working at capacity to not working at all. When the lockdown started to ease, things were a little better - but the hospitality industry was cutting costs wherever it could and linen was one of them.” The two partners had built up their business over the years and had established a long list of clients across North-west England. It was a steady business - until the lockdown forced their customers to close.  The owners went into survival mode, stopping any unnecessary expense and taking full advantage of the government furlough scheme to staff. They applied to their current lenders for a payment holiday - but with no work being done and no income coming in, it would not be enough to keep the business afloat.  The business went to their bank to ask about funding from the government schemes. CBILS vs Bounceback loans Both Bounce Back Loans (BBL) and CBILS are government-backed schemes which were set up to support to businesses across the UK that were experiencing revenue losses, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak.   The actual funding is provided by high street banks and other lenders on a commercial basis, although the government will support the loans, which should allow businesses which would otherwise fail lenders' affordability criteria to secure the funding they need. CBILS can provide loans of up to £5million, and have recently been extended to repayment terms of up to 10 years with nothing to repay for the first 12 months. As a large-scale funding product, they can take time to arrange - when the scheme was announced back in April, delays of a month or more were common. However, this has reduced as the banks and other lenders providing the schemes have found their feet. Interest rates for the scheme will depend on the lender but are, however, uncapped. The Bounce Back Loan Scheme (BBLS) was introduced to allow smaller businesses to access finance more quickly during the Coronavirus outbreak. The scheme is designed to help small and medium-sized businesses borrow between £2,000 and up to 25% of their turnover, and the maximum loan available is £50,000. It is designed to be faster to access than the government’s CBILS initiative, but the big difference is the interest rate – which, unlike the uncapped rates offered by some lenders under CBILS, is capped at just 2.5%. The length of the loan is six years but early repayment is allowed, and without early repayment fees. The funding that could save our client's business? The partners believed that a Bounce Back Loan would be insufficient for their needs - but their bank was reluctant to help with progressing an application for CBILS. “The problem was that we had already borrowed heavily to move the business forward - we had needed new laundry equipment and vehicles at the end of last year. We thought we would be investing to make the business more profitable - instead, the bank gave the impression that we had borrowed more than we could afford. They refused to lend us any more - even under CBILS.” They turned to us at Rangewell instead, and our Covid Crisis Funding Team went to work. We looked at the scale of their financial commitments and saw that the scale of their business and their current commitments would require a loan of £250,000 if they were to get through a prolonged lockdown. The solution we arranged We looked at the business its current funding and saw that the main reason for their bank's refusal to lend was the fact that their current lending was at the limit of their credit assessed by the bank. We saw that the solution would be to apply for funding with another bank.= We found another lender with a more flexible approach to lending limits and arranged the funding required. The funding Rangewell secured £250,000 over 60 months 4.9 % interest  Repayment holiday for the first 12 months “We have seen many business owners, including our customers, forced to wait for the funds they needed. We had the cash we needed to stay afloat, with the funds in our bank ready to call on - and with no repayments to make in the first year.” Ready to find the answers to your funding needs? Contact the Rangewell Funding Hotline on 020 3318 2613 Rangewell finds the financial solutions that your business needs The Rangewell Covid Crisis service is easy to use - and lets you talk directly to a funding expert to get the solution that you need.  Just call us and one of our Business Funding Experts will be able to discuss your options, and work out the most cost-effective ways to provide the funding you want - whatever the challenge your business plans present. We can help you see if a CBILS or Bounce Back Loan might provide the answers you must have and streamline your application - or whether there is another form of funding which could provide a better answer for your particular circumstances. Then we will search the entire lending market to find the most appropriate lender, and to make the application for the loan you need.  Calling us saves you valuable time - and it could help you save your business. To find out more call the Rangewell Covid crisis funding helpline on 020 3318 2613 or email [email protected] Keeping your business afloat with help from Rangewell Individual arrangements tailored to your circumstances Adverse Credit – no problem Repayments geared to your turnover Expertise in funding for your sector Bounceback and CBILS expertise Talk to Rangewell – the business finance experts

CBILS Case Study: getting CBILS when the bank said no

Funding a lifeline for a linen supplier - how two CBILS loans were better than one TL:DR Not many businesses will come out of Covid completely unscathed. When a specialist linen supplier was struggling to keep their business afloat, their bank would only offer a Bounce Back Loan of £50,000. We stepped in to find a way to provide £500,000 with CBILS funding.  Urgent update: The government has announced an extension to the deadline for CBILS applications, which will now remain open until the end of January 2021. Don’t miss out on the government-backed funding you must have - call us now. Covid has been responsible for big changes in every business sector. Some have been able to continue to work - others have been shut down completely. These sectors - and the suppliers that depend on them - are facing the biggest challenges of all. “We supply linen - tablecloths and napkins - to restaurants, hotels and events caterers. The lockdown meant that we went from being very busy to doing nothing overnight - and even when things started to ease, and the hospitality industry was allowed to open and start working towards recovery, our recovery was lagging a very long way behind.” The leisure sector has been particularly hard hit, with all bars and restaurants shut down for months under the lockdown rules, and hotels in a similar position. It has meant major problems for businesses that work providing the sector with the supplies it needs - including linen. We were approached by the owners of a London-based linen hire business who found that the Covid crisis meant severe cashflow problems for them. The costs that needed to be covered The two partners had built up a business over several years and had established a long list of clients across London. It was growing fast - until the lockdown forced their customers to shut their doors.  “Before Covid-19 hit, we had plenty of business and no money worries. As soon as the crisis hit, things were the other way around.” With a salary bill alone close to £1m per year, the problems were severe. The owners went into survival mode, stopping any unnecessary expense and taking full advantage of the government scheme to furlough staff. They applied to their current lenders for a payment holiday, which was agreed - but it would not be enough to keep the business afloat.  The business went to their bank to ask about funding from the government schemes - particularly the Coronavirus Business Interruption Loan Scheme - or CBILS. “Our bank manager seemed to be helpful, but when we saw him, he suggested that a Bounce Back Loan might be the best that he could do.” CBILS vs Bounce Back Loans Both Bounce Back Loans (BBL) and CBILS are government-backed schemes to provide financial support to businesses across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak. The actual funding is provided by high street banks and other lenders on a commercial basis, although the government will support the loans, which should allow businesses which would otherwise fail lenders' affordability criteria to secure the funding they need. However, there are some crucial differences between them. CBILS can provide loans of up to £5million, and have recently been extended to repayment terms of up to 10 years with nothing to repay for the first 12 months. As a large-scale funding product, they can take time to arrange - when the scheme was announced back in April, delays of a month or more were common - this has been reduced as the banks and other lenders providing the schemes have found their feet. Interest rates will depend on the lender and are uncapped. The Bounce Back Loan Scheme (BBLS) allows smaller businesses to access finance more quickly during the coronavirus outbreak. The scheme helps small and medium-sized businesses borrow between £2,000 and up to 25% of their turnover, and the maximum loan available is £50,000. It is designed to be faster to access than the government’s CBILS initiative, but the big difference is the interest rate which, unlike the uncapped rates offered by some lenders under CBILS, is capped at just 2.5%. The length of the loan is six years but early repayment is allowed, without early repayment fees. This means that finance secured under a BBL could cost much less than that under a CBILS loan. As businesses start to emerge from the crisis, these lower costs can make a big difference to their long-term viability. Which funding did our client need? The partners believed that a Bounce Back Loan would be insufficient for their needs - but their bank was reluctant to help with progressing an application for CBILS. They turned to us at Rangewell instead - and our Covid Crisis Funding Team went to work. We looked at the scale of their financial commitments and agreed that £50,000 - the maximum that can be provided under BBLS - would not be nearly enough to cover their commitments. The scale of their business commitments and the depth of their cashflow problems would require a loan closer to £500,000. We have found that many businesses need help not just with getting funding to help them through the crisis, but to understand the most appropriate type of government-supported funding to use. As the UK leaders in business funding for the SME sector, we are in the ideal position to help.  The solution we provided We looked at the business and the partners' funding and saw that one of the reasons for their bank's reluctance to help was the fact they already had considerable lending, and a large CBILS loan would exceed their limits. We saw the solution would be to apply for two CBILS loans, of £250,000 each, placing one with a different lender. This would satisfy the lending criteria of the partners' current bank, and provide a way to secure all the funding necessary. “Rangewell helped us to take care of all the details with both applications. They explained how to complete the forms, what supporting documents we would need - and used their contacts to speed things along. We have seen many business owners, including our customers, forced to wait for the funds they needed. We didn’t have to wait, and with the funds in our bank, we are ready to ramp up as restaurants slowly open again. We have the funding that we need to stay afloat - especially as there are no repayments to make in the first year.” The funding Rangewell secured £500,000 over 60 months at 4.9 % interest  Repayment holiday for the first 12 months Ready to find the answers to your funding needs? Contact the Rangewell funding hotline on 020 3318 2613 Rangewell finds the financial solutions that your business needs The Rangewell Covid Crisis Service is easy to use - and lets you talk directly to a funding expert to get the solution that your business needs.  Just call us and one of our Business Funding Experts will be able to discuss the options, and work out the most cost-effective ways to provide the funding you want - whatever challenge your business plans present. We can help you see if a CBILS or Bounce Back Loan could provide the answers you must have and streamline your application - or whether there is another form of funding which could provide a better answer for your particular circumstances. Then we will search the entire lending market to find the most appropriate lender and to make the application for the loan you need.  Calling us saves you valuable time - and it could help you save your business. To find out more call the Rangewell Covid Crisis Funding helpline on 020 3318 2613 or email [email protected] Keeping your business afloat with help from Rangewell Individual arrangements tailored to your circumstances Adverse Credit – no problem Repayments geared to your turnover Expertise in funding for your sector Bounceback and CBILS expertise Talk to Rangewell – the business finance experts

CBILS Case study: A second loan for a wholesale bakery

Taking out a second CBILS loan TL:DR All kinds of business have been hit hard by Covid. When a wholesale bakery found that they were facing a business downturn because of the lockdown, they arranged CBILS funding. However, they had not anticipated the Covid crisis continuing and the effects of a second wave. When their bank was unable to increase their CBILS funding, they approached us at Rangewell. Despite his exposure to his existing debt, we found a way to provide an additional £250,000 with a second round of CBILS funding.  Urgent update: The government has announced an extension to the deadline for CBILS applications, which will now remain open until the end of January 2021. Don’t miss out on the government-backed funding you must have - call us now. Covid has provided challenges to every business sector. Even those sectors, such as food manufacturing, have suffered - because, in many cases, their customer base is no longer buying. Our client was a wholesale bakery, providing a wide range of bread and bread products - such as rolls and speciality loaves - for a variety of customers across the West Midlands.  Covid had meant some changes to their business. “The food manufacturing industry can’t have remote working. Obviously, you can't have people working from home when they need to co-operate on a production line.  But of course, as a bakery, we have to operate to very high standards of hygiene anyway, and after a few issues to start with, we found ways for our workforce to socially distance and use PPE. We were confident that we should be able to run the production floor as normal. We have a modern factory and setting up perspex barriers around workstations and the like was not too much a problem. We had a few missed deliveries from board suppliers to start with, but that all got sorted out. For a while, it looked like we could carry on with business as usual - but then the orders started getting cancelled.” The problem was that people were buying fewer sandwiches thanks to lockdown. The lunchtime takeaway trade that was one of the pillars of the business disappeared overnight as the lockdown forced people to work at home, or not work at all. The business had a broad base and had enjoyed a turnover of £1million last year. They were looking forward to an even busier year in 2020, with new contracts - but when those contracts were suddenly cut back or cancelled altogether, the owners started to look at the financial impact. “It was a national emergency, and no-one seemed to know what the real impact was going to be. Of course, we were never in any danger of having to shut down. People will always want to eat bread, but the general consensus was that we might be going slow for around three months while the epidemic got under control. We might not fire all our ovens every day, but we should still be able to keep baking a reduced volume. We had some cash reserves, but we thought it would be prudent to get some extra funding arranged to tide us over.” When the government’s financial support packages started to become available, the partners immediately saw that they could be a big help. They furloughed some of their workforce and took advantage of the rates and VAT holidays. But it was the ability to borrow a substantial amount of money with a CBILS loan that seemed to be the most important piece of support. About CBILS The government's Coronavirus Business Interruption Loan Scheme - or CBILS - was designed to help businesses affected by Covid-19. Loans are provided by banks and other commercial lenders, but they are underwritten by the government.    The scheme can provide loans of up to £5million, crucially, with nothing to repay for the first 12 months. It was seen as being the ideal solution for businesses of all kinds that found that their orders have been put on hold because of lockdown. However, CBILS is provided by commercial lenders, and although the government scheme will reduce the risk of lending, it cannot altogether remove it.  Lenders will therefore lend under their own lending criteria. There can be delays which can cause problems to borrowers with an acute cash crisis, and some lenders may prove reluctant to lend, despite the government underwriting off all loans. When the business owner approached his existing lender for help, he found they would not provide additional funds - even under CBILS. The bakery had acted promptly to arrange £100,000 funding under CBILS and, as one of the first businesses to take advantage of the scheme, they had been able to secure funding relatively quickly. “We were relieved to get the support of CBILS arranged. The fact that it brought large-scale funding with no strings was great - but even better was the fact that there were no repayments to make for the first 12 months. It meant that we had the funds in our bank and no repayments to make. We were confident that we could get through the lockdown and back into full production in three or four months, and be in a position to repay the loan before the repayments started to be required.” The ongoing funding crisis It was a view that was common when the lockdown began, and CBILS became available, but as the months went by, it started to become clear that the problem was worse than first thought. “People have started heading back to work - you only have to look at the roads to see the proof of that. But although it is hard to appreciate it when you are stuck in traffic, they are not going back to the way things were. Shops are open, offices are open and factories are open - but the offices are all empty. People are working from home if they can, and that means they are still not buying sandwiches at lunchtime. We are still on short working as a result.” It started to become apparent that the epidemic was taking longer than anyone had initially anticipated. “It is not back to business as usual - in fact, things may be getting worse.” “We thought we would be back to work, and making an inroad into the money we had borrowed. In fact, we are still on short time, and that big cash reserve we arranged is starting to look a lot less adequate now. In fact, we are getting through it frighteningly fast - we needed more.” The threat of Covid is continuing - and businesses that thought they had arranged sufficient funding to see themselves through the crisis are starting to discover that they may not have the financial safety net they thought would be adequate. “They are talking about another lockdown, and that would mean that the production we have put back on will be cut back again. Looking at the figures, we realised that we needed another cash injection and this time, we wanted to call in another £150,000.” The problem was that the bakery was not the only one facing a funding crisis caused by the prolonged Coronavirus crisis. The ease with which the first CBILS loan was arranged was deceptive. Many lenders were overwhelmed and taking months to process applications - months which could mean disaster for businesses which had run out of the funds they needed to keep trading. Worse still for them, their bank was unwilling to increase the funding that they had already made available under CBILS. The bakery had already reached the limit of their available credit under the bank's rules - which had been made more stringent because of Covid. The bakery owners turned to Rangewell for a solution to their new funding crisis. We looked at the problems they were facing and saw that getting a second CBILS loan was going to be key to the survival of the business and that we would need to act quickly - because the bakery would soon be in serious trouble. Ready to find the answers to your funding needs? Contact the Rangewell funding hotline on 020 3318 2613 A rescue plan We saw that the barkery’s problems had become acute, and used our connections to find a short-term loan which would provide an immediate lifeline for the business. The rate for this was high, but we believed that providing a second CBILS loan would allow the short-term loan to be paid off without incurring excessive costs. We then approached a lender who specialises in lending for more challenging business situations. Their lending criteria were very different from the bank, and they were happy to make an additional advance.  By making use of the government's underwriting guarantee under CBILS, the lender was able to provide a loan of £150,000. The lender required a personal guarantee and stipulated some conditions - but crucially they would be prepared to provide the funds required.  By making use of the government's guarantee under CBILS the lender was able to provide the loan with 5 years to repay - after the initial 12 month repayment holiday. “£150,000 is the help we needed. We can stay in business until the customers start buying bread. We know that could still be months away but, thanks to CBILS, I don’t need to pay anything for the finance for a whole year.” The solution we provided We have found that many smaller businesses will need help, not simply to get through the crisis but to access the funding the government has promised. As the UK leaders in business funding for the SME sector, we are in the ideal position to help.  “Rangewell’s expertise helped me at every stage. Restructuring our finances, which lender to approach, how to complete the application, what supporting documents I should need - and made sure I got the funds I needed. CBILs is ideal for us. It makes borrowing a lifeline affordable - especially as there are no repayments to make in the first year.” The funding Rangewell secured £150,000 over 60 months 7 % interest  Repayment holiday for the first 12 months Rangewell finds the financial solutions that your business needs Whatever business sector you work in, Covid will mean new financial challenges - and those challenges may not be over yet. The Rangewell Covid Crisis Service is designed to provide the solution. Our Business Funding Experts will be able to discuss your options and work out the most cost-effective ways to provide the funding you want - whatever the challenge your business conditions are presenting you with. We are independent, and we know the entire lending market. That means we can take a view that will put your interests first - and if you have not been successful because of your bank’s lending policies, we will work to find one that is more sympathetic. At Rangewell we work to find the financial solutions you need - not excuses Call us - we can help you see if a CBILS or Bounce Back Loan might provide the answers you must have and streamline your application - or whether there is another form of funding which could provide a better answer for your particular circumstances. Then we will search the entire lending market to find the most appropriate lender and to make the application for the loan you need.  Calling us could help you save your business. To find out more call the Rangewell Covid crisis funding helpline on 020 3318 2613 or email [email protected] Keeping your business afloat with help from Rangewell Individual arrangements tailored to your circumstances Adverse Credit – no problem Repayments geared to your turnover Expertise in funding for your sector Bounceback and CBILS expertise Talk to Rangewell – the business finance experts

Rangewell’s report on the economic performance of the Wholesale & Retail Sector during the Coronavirus pandemic

Summary: There is significant evidence to show that wholesale & retail, as a sector, was one of the fastest to recover when restrictions were eased in June, but still one of the hardest hit from the economic fallout of Coronavirus. The anecdotal testimony of the consequences of the crisis has been prevalent since February, and now the economic data seems to support the ‘word on the street’.   The GDP data show when restrictions were at their highest during the lockdown, the sector was 38% down from it’s February output. By July, the sector had bounced back to its February levels.  Overall footfall decreased to below 70% of its level in the same period of last year. In September 2020, retail sales volumes increased by 1.5% from August; this is the fifth consecutive month of growth. In the three months to September, retail sales volumes increased by 17% when compared with the previous three months; this is the biggest quarterly increase on record as sales picked up from record-low levels experienced earlier in the year. Clothing sales have struggled to bounce back to their February levels, remaining 13% down in September compared to February. While sales in household goods, such as DIY and electrical items, did well - increasing 11% above their February levels.  ONS data found that 73% of workers in the sector returned to working at their normal place of work by 22 October, while only 50% of business in the retail & wholesale sector applied for the Coronavirus Job Retention Scheme. Only 47% were successful when they applied to the government-backed accredited loans. Of those who applied to a Government-backed scheme, 88% found it helped to continue trading. The ONS found that 88% did not reserve financial assistance from banks or building societies. Of those who did gain funding from a bank, 98% said it helped their business continue trading. The IHS Markit UK Household Finance Index in September showed that there was a reduction in household spending, savings and personal credit availability, while the Financial Conduct Authority recently estimated that 12m people are struggling with bills or loan repayments as a result of the pandemic, with under 35s the most likely to be affected. The shortage of money in the British public’s pockets will have a knock-on effect on the long-term recovery of the sector. Wholesale & Retail Sector GDP  Like with all other industries, Wholesale & Retail saw a dramatic drop of 38% in output while the cases and Government restrictions rose. While other sectors struggled to return to their February levels, Wholesale & Retail saw its output bounce back in July.  Monthly output (March, April, May, June, July, August 2020) as a proportion of February 2020 output; February 2020 output = 100% Source: Office for National Statistics, GDP monthly estimate, UK: August 2020: PHE Weekly Cases data, people tested positive, UK Whole. Footfall  In the week ending 18 October 2020, overall footfall decreased to below 70% of its level in the same period of the previous year.  Many non-essential shops were allowed to open on 15 June 2020 in England, 12 June 2020 in Northern Ireland and 22 June in Wales. In Scotland, some non-essential shops were allowed to reopen from 29 June, and more from 13 to 15 July. Source: Office for National Statistics, Business Impact of COVID-19 Survey (BICS), 22 October 2020.  Retail Sales Volume & Value Retail sales volumes continued to increase over five consecutive months, after the sharp drop in February.   September saw the value of retail sales increase by 1.4% and volume sales by 1.5% when compared with the previous month. When compared with February 2020’s pre-pandemic level, retail sales were 3.9% and 5.5% higher in value and volume respectively. A strong rate of growth is seen in the three-month on three-month growth rate at 17.7% and 17.4% for value and volume sales respectively. This is the biggest quarterly growth seen on record as sales recovered from the low levels experienced earlier in the year. In September, clothing sales were 12.7% lower than in February, while department stores were 0.9% lower. Volume sales in household goods stores and “other” non-food stores increased to 11.0% and 10.7% above February, respectively. Feedback from household goods stores had informed the ONS that home improvement sales from DIY and electrical goods stores did well in to help with the recovery of sales. Chart shows the March to September sales as a proportion of February 2020 where February sales equals 100%. Source: Office For National Statistics, Business Impact of COVID-19 Survey (BICS), 22 October 2020: PHE Weekly Cases data, people tested positive, UK Whole.  Online sales The proportion of online spending peaked during lockdown and still remains higher than in February. Online sales rose across all sectors when compared with the same time a year earlier. This is because of online sales reaching higher than usual levels over the course of the pandemic. Department stores were the only stores to increase sales in September when compared with August. Feedback to the ONS from these stores stated that the online pre-ordering of a new range of gaming products helped boost their sales. Despite monthly declines across all sectors except department stores, the proportion of online sales was at 27.5%, compared with the 20.1% reported in February. The proportion of online sales increased across all sectors with food stores nearly doubling their online proportions from 5.4% in February to 10.4% in September. Will further restriction hurt the industry? The data indicates there could be longer-term effects on the sector, with household income being squeezed, but there is clear induction that financial support - partially from the Government-back schemes - has had a positive impact, which helped businesses within wholesale & retail continue trading. The Financial Conduct Authority recently estimated that 12m people are struggling with bills or loan repayments as a result of the pandemic, with under 35s the most likely to be affected. The shortage of money in the British public’s pockets will have a knock-on effect on the long-term recovery of the sector. This is supported by the IHS Markit UK Household Finance Index which, in September, showed there was a reduction in household spending, savings and personal credit availability.  Data from the Office For National Statistics, Business Impact of COVID-19 Survey (BICS) on the 22 October 2020 in the Wholesale & Retail sector found: 73% of workers in the sector returned to working at their normal place of work.  50% have applied for the Coronavirus Job Retention Scheme, 80% of them were successful.  33% have applied to the government-backed accredited loans, 47% of applicants who applied were successful.  Wholesale & Retail businesses: 36% applied for business grants funded by the UK and devolved governments,17% applied for business rates holiday, 22% applied to defer VAT payments, 8% applied to the HMRC Time To Pay scheme. Of those who applied to a Government-backed scheme, 88% found it helped them to continue trading. 88% did not receive financial assistance from banks or building societies. For those who did gain funding, 98% said it helped their business continue trading.

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