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Getting help with CBILS

Published on 18th April 2020 - Last update on 21st April 2020

The government’s CBIL Scheme seems  to have run into a problem – at Rangewell we're looking at ways to help

The government is working to provide solutions for those businesses that are worst affected by the coronavirus crisis.

They have promised that an initial £330billion of guarantees will be made available. This is a massive sum, equivalent to 15% of UK GDP. It should be enough to help companies manage cash flow during this difficult period.

The Coronavirus Business Interruption Loan Scheme - CBILS - is aimed at helping small and medium-sized companies stay in business by allowing them to borrow up to £5m at preferential rates through the British Business Bank.

It is key to the government’s provisions for the SME sector.

The Coronavirus Business Interruption Loan Scheme provides loans, which must be repaid just like any other commercial funding. However, these loans will be interest-free for 12 months, with the government promising to underwrite 80% of the loan should a business fail.

All viable small businesses affected by COVID-19 will be eligible and CBILS supports a wide range of business finance products, including Term Loans, Overdrafts, Invoice Finance and Asset Finance. There are more than 40 lenders currently working within the CBILS scheme.

It should be possible for any viable small business to use the scheme to secure the funding they need helping them maintain cashflow even if their customers are not coming in and they cannot get work out.

But things may not be working out as well as expected. 

Despite the government’s attempt at generosity and underwriting coronavirus loans to small businesses during the COVID-19 crisis, the actual figures involved show that the scheme itself is running into problems. Recent figures suggest that only around one in five UK businesses who have formally applied for the government-backed loans under CBILS have been granted the emergency funding they needed during the COVID-19 lockdown, raising concerns that the programme is failing to get money out fast enough to support struggling firms.

There is certainly plenty of demand for funding as struggling firms realise the depth of the problems caused by the coronavirus crisis.

Figures released by the banking lobby group, UK Finance, showed that British banks are trying to help - 6,020 firms have borrowed a grand total of just £1.1bn in three weeks.

This means that they have nearly doubled the number of business loans for customers impacted by the COVID-19 lockdown in just one week, but critics say the government-backed scheme is still failing to get money out fast enough to support struggling firms. 

What is going wrong?

Critics of the scheme say that there are at least two areas of concern.

First is the scale of the lending being provided. The £1.1bn provided by the scheme so far certainly seems a great deal of money, but it needs to be compared with the level of existing loans to small and medium-sized business before the pandemic. At Rangewell, as experts in funding for the sector, we know that figure is in the region of £155bn, and that is supported by the Bank of England’s figures going back to February. 

It looks as though not enough funding is being provided by CBILS. Chancellor Rashi Sunak promised a flood, and the scheme has so far only provided a comparative trickle. 

Second, some banks seem to be dragging their feet with funding. The old problem of red tape caused by the “know your customer” rules when lending to first-time borrowers may be the problem, but certainly, many banks seem to be taking too long to provide the funding small businesses so desperately need to survive. There seems to be a massive gap between the number of inquiries about CBILS, which is currently estimated at over 300,000, and the 28,461 actual applications. 

It seems that the process of applying for funding is time-consuming and difficult - and that many small businesses are missing out on the funding they need as a result. The risk with the current arrangements is that too little money reaches small businesses at their point of maximum stress. If they are to survive long enough to be around for the recovery, they need more help accessing the promised government funding now. 

Getting help from Rangewell

At Rangewell, we are determined to provide the help small businesses need - to access the funding that the government has promised.

We understand the challenge. Banks and other lenders are required to lend on a commercial basis, and the current crisis is so unprecedented that they find it difficult to find firm criteria on which to base their lending decisions. 

Many smaller lenders have ceased lending altogether, such is the depth of confusions caused by the crisis.

At Rangewell we want to provide the solutions.

We are working to maintain our knowledge of current lenders' plans - and we know those who are most likely to be receptive to an application under CBILS. 

The initial government plans for the administration of CBILS was for businesses to approach lenders directly. We believe that this is unlikely to be the best solution in practice - and that by coming to us with your needs, you can call on our knowledge of lenders.

That means:

  1. Help with selecting the most appropriate funding type. The CBILS scheme can be used to support many different types of commercial lending. Getting the type that is most appropriate for your needs will not only help secure the funding you need, but it will also make it easier for your business to use the funding it receives.
  2. Using our expertise to select the most appropriate lenders. We know that some lenders are more receptive to applications from businesses in particular sectors - which ensure that we can ensure your loan application is seen by the team that is most likely to say yes.
  3. Having our negotiating skills working for you. Commercial lending can be a competitive process and there is often scope for negotiation. It can mean getting rates and terms that are better for you and your business.
  4. Getting the money your business needs faster - and paying less for it. We can help secure the funds you need faster because we know the lenders to approach and the best way to streamline the application process with them.

We know that your business is in crisis thanks to the epidemic. Its survival depends on getting the funds you need quickly. So our promise is simple. During the current crisis, we can provide the quickest way to find the funding you need - and our service is absolutely free.

Call us now – our experts are ready to help you with your finance problems during the coronavirus crisis. Call us at Rangewell on 020 3637 4150 - or email  [email protected]. Our service is free.


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