Success Story: A lifeline for a sound and vision businessPublished on 11th August 2020 2020-08-11T11:00:00+00:00 - Last update on 16th August 2020 2020-08-16T19:02:40+00:00
Getting a ‘yes’ when banks say ‘no’
TL:DR When a sound and vision business had their full season's bookings cancelled by Covid, and his bank declined further lending due to affordability issues, things weren't looking too good. However, Rangewell could see it was a viable business and so, with their expert knowledge of lenders, was able to present the figures in a positive light, enabling the business to successfully obtain funding under CBILS for the maximum £250,000, with 5 years to repay and at only 6% after the initial 12 months.
Covid has caused problems for every business sector. Some have been unable to bring in stock, others have experienced difficulties with staffing or have suffered a slowdown in custom. Some have even been forced to cease working entirely.
Those in the hospitality sector have been particularly affected, and things have been especially difficult for those involved in the £multi-million summer festival business.
There are around 250 music festivals in the UK each year. Together, the UK music festival and concerts market was worth just over £2.6billion in 2019, and 2020 was set to be even bigger. However, Covid and lockdown meant that the sector was shut down completely.
We were approached by the owner of a business specialising in the provision of sound and vision installations for festivals. His business had been thriving and had full bookings for the entire summer season - but every event was subsequently cancelled.
“I was left with a unit full of state-of-the-art audiovisual equipment. Everything from a 2000 watt PA that you can carry in one hand to a screen large enough for Wembley stadium - and nowhere to use any of it.”
He had five full-time staff that he wanted to keep on and furlough came as a big help - but with finance to pay on his equipment and vehicles, he realised that the business was in serious trouble. There was little prospect of any revenue coming in until Spring 2021 at the earliest.
The government's Coronavirus Business Interruption Loan Scheme - or CBILS - looked as though it might provide a lifeline.
CBILS was introduced by the government to provide financial support to smaller businesses across the UK that were losing revenue and seeing their cashflow disrupted as a result of the COVID-19 outbreak. The scheme provided loans of up to £5million and, crucially, there was nothing to repay for the first 12 months.
However, when our client approached his bank, they were unable to provide him with funding under CBILS - because they had already advanced substantial funds to enable the business to acquire assets.
He talked to our funding experts instead.
We saw that he did have problems with affordability and that, according to the strict lending criteria set by the high street banks, he would not be eligible for CBILS or any other kind of funding.
However, we also saw that his business was viable and that there were ways to present his figures in such a way that they could make his business eligible - if the right lender was approached.
We work with virtually all the lenders across the UK and we know which are most suitable for particular types of lending - even when there are challenges to overcome. We saw that an alternative lender - one of the new types of financial providers that have grown up in recent years - could provide a solution.
We helped our client complete an application for £250,000, the maximum that can be offered under CBILS without a personal guarantee, and approached our contact at the lender.
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 - at just 6%.
With the usual rate for this scale of loan closer to 10%, we recognised that this deal not only represented a lifeline for the business, it was also something of a bargain.
“Rangewell found me the cash I needed to keep the business afloat. I have the cash I need to cover my overheads while we are suffering from lockdown, and I will not be losing any of my team or my equipment. That’s going to be important because we are already looking at bookings for next year.
We have a future to start looking at again, thanks to Rangewell.”
- £250,000 at 6% with 12 months payment holiday and 5 years to repay
- The client had the funding he needed to keep his business solvent until bookings started to come in again - with nothing to pay back for 12 months
Rangewell finds the financial solutions that your business needs
Many businesses have hit problems thanks to Covid and are still struggling despite the government's schemes. At Rangewell, we can help you access the funding you need to keep your business afloat.
The Rangewell service is easy to use - and lets you talk to a funding expert to get a solution that is planned around 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 the challenge your business plans present.
It can be a lifeline for your business.
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
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