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Coronavirus - a horticultural crisis
Many non-essential retailers have been forced to shut because of the coronavirus. For most, this is a costly necessity. They cannot expose staff and customers to the risk of contagion, and the need to shut the doors until the crisis is over is impossible to argue with. Lives are at stake. But for the horticultural sector, the shut down is nothing short of a disaster. The closure of the UK's 2,000 garden centres and nurseries as ‘non-essential’ during the key early spring season means that any business involved in "ornamental horticulture" cannot trade during their busiest period. Garden centres cannot open - while growers have no outlet for their plants. This means that millions of bedding plants, shrubs and even trees will have to be binned in the coming days and weeks as they pass their selling-on date. It is particularly serious for the sector as there is no scope for storing living plants. It could mean ruin for UK growers who are potentially facing a loss of their entire 2020 income. The main trade asset of ornamental plant growers' is their inventory of plants - with nowhere to sell them, many producers will have no alternative but to go out of business. Up to a third of producers could go bust, as retailers cancel orders that they cannot sell on. What can you do about it? The closure of garden centres due to the pandemic comes at the worst possible time - the value of stock during the key spring trading period is typically three to four times the year-end value of most businesses. It is particularly frustrating as the UK’s 23 million gardeners are spending more time in their gardens, and desperate for the plants they cannot buy. One partial answer may be online sales. Setting up a website to order plants may be a costly proposition, but it may be the only way to salvage the season. The costs involved include: Creating a website to allow online orders - or showcase plants for telephone orders Marketing - to get potential customers to the site Setting up delivery systems - vans and drivers may need to be found All will be required at short notice which could force up the costs. However, there could be some sources of cash. Local grant funding could be available for many small horticultural businesses that currently qualify for Small Business Rate Relief (SBRR), a grant of £10,000 will be paid automatically by the local council. Your local authority will contact you in the early part of April with the details of what you are entitled to. If your business has a rateable value between £15,000 and £51,000, the local council grant could rise to £25,000. However, you may need other types of funding - and need them immediately. Do you need help to access CBILS or alternative funding for your horticulture business? Contact us today and let us help you find your way to a more secure future The Coronavirus Business Interruption Loan Scheme - CBILS Grower or retailer, you may be eligible for the Coronavirus Business Interruption Loan Scheme (CBILS). This could let you borrow up to £5m, interest-free for 12 months, with the government promising to underwrite 80% of the loan should a business fail. You can apply to lenders directly – but a better solution may be to call us at Rangewell, where we can use our expertise to help you secure the funding you need. The CBILS facility can support many types of lending. Most popular is likely to be cashflow support which can provide a reserve of cash to tide a business over while income is reduced. You can borrow from £1,000 - £500,000 – or up to £5m through the Coronavirus Business Interruption Loan Scheme. We may be able to secure the funds you need in a matter of days If you are keeping your food business open through the crisis, you will need to take all the necessary steps to be compliant with guidance without delay. You will then need to look at your financial needs - and, at Rangewell, we are ready to help. Whether we can help you find the answers to your needs with a loan under CBILS, or need more extensive answers such as Asset Refinance or even a remortgage to keep your business blooming, our team is ready to help. We know all the lenders in the markets, and we can work with you to find the most cost-effective answers to your funding needs. During the current crisis, we can provide the quickest way to find the cash you must have to survive. Call us now – we understand the pressures you are under in the horticultural business – and our service is absolutely free.
Returned BCR Fund has the potential to support Charities and Healthcare Businesses
The £50m grant being returned by The Nationwide Building Society should be channelled to Charities and Healthcare Businesses within days Last Friday the 3rd April, The Nationwide Building Society abandoned its plans to enter the business banking market and said it was returning the £50m it was awarded last year from the Banking Competition Remedies (BCR) Capability & Innovation Fund. This follows in the footsteps of Metro Bank who also returned £50m that it was awarded from the same Fund on the 26th February 2020. It is obvious to all observers that the well-meaning Banking Competition Remedies package of measures so painfully drawn up after the failure of the RBS / Williams & Glynn demerger is no longer fit for purpose as SMEs and charities throughout the UK face unprecedented pressures on cash flow due to the COVID-19 crisis. However, all the monies being handed back to the Banking Competition Remedies Fund could, potentially, be returned to The Treasury within days and channelled to support specific sectors which are vital to the health and well-being of the UK. Helping businesses most in need We propose that this funding should be diverted to those sectors most in need, including: Essential healthcare businesses such as dentists, opticians, pharmacies and vets who have either been forced to close or are operating reduced hours under immense capacity constraints. Such businesses will again perform vital roles in the health and wellbeing of the nation once the lockdown is lifted and cannot afford to waste time and resources worrying about their cash flow needs over the coming months. Registered Charities operating in the UK for the benefit of UK Citizens whose focus is on education, poverty alleviation, training, accommodation, community development, support of the armed forces or emergency services. This simple mechanism would allow all eligible charities and healthcare businesses to apply for: Loans up to 10% of 2019 turnover For a period of 5 years No Personal Guarantees Interest-Free for the full duration of the loan Eligible charities would be registered and in good standing with the Charities Commission and healthcare businesses would be registered and in good standing with their appropriate regulator (CQC etc). Nic Conner, Rangewell’s Head of Research said: “It’s not even been a year since Nationwide was awarded the £50 million from the Banking Competition Remedies fund to support SMEs and they have already abandoned their plans to finance small business at a time when they are most needed. "Charities and Healthcare Businesses are the hidden backbone in ensuring the health and wellbeing of the nation - they don’t have time to be worrying about cash flow right now". "Rangewell’s suggestion to re-allocate the £100m being handed back to the Treasury from the failed Banking Competition Remedies Scheme and quickly getting it into the hands of Charities and Healthcare Businesses in the form of an interest-free five-year loan would be innovative, exactly what the original scheme was designed to be. “The Treasury urgently needs to urgently get all unspent Banking Competition Remedies funds and ensure it is used to support charities and businesses that need it most. When I say urgently I mean within days not months as British businesses need the cash now.”
3 things the Chancellor needs to improve for the CBIL Scheme to be effective
As things currently stand, we are calling on the Chancellor, Rishi Sunak, to make three further changes to the Coronavirus Business Interruption Loan Scheme (CBILS) to make it more beneficial to those that need it and more accessible. In our view, our proposals are relatively simple, will save thousands of companies and should be implemented immediately. 1. The squeezed middle has been helped - now it’s time to help the “squeezed sectors” We welcomed the changes The Chancellor made to provide support to the “squeezed mid-sized companies” which now allows them to access loans up to £25m, but now he needs to focus on giving better support to the “squeezed sectors”, most notably hospitality, retail, childcare, leisure and some healthcare sectors. The hospitality, retail, childcare and leisure sectors have never been popular with High Street Banks or Mainstream Lenders, but The Treasury has already identified a full list of such businesses via the “Business Rates Holiday Scheme”. Another at-risk group are healthcare businesses. Businesses such as dentists, opticians, pharmacies and vets have either been forced to close or are operating reduced hours under immense capacity constraints. These types of business will perform vital roles in the health of the Nation once the lockdown is lifted, so we believe The Treasury should be looking after them now. The Treasury has a full list of such businesses via their regulatory bodies so, subject to business viability checks, we believe it should underwrite 100% of loans up to £250,000 to such businesses (rather than the 80% currently proposed). Nic Conner, Rangewell’s Head of Research said: “The firms most at need are those in sectors which have always struggled to gain finance, like Hospitality, Leisure and Retail and those vital services like Pharmacies, Dentists and Opticians that will be bearing the strain once lockdown is lifted. The most at-risk sectors and the businesses who are operating at their capacity constraints who need the money urgently are unable to gain the funds quickly and efficiently - this could not have been the Government’s intention. The Treasury needs to underwrite 100% of the loans up to £250,000 to these at-risk sectors which they have already identified via the “Business Rates Holiday Scheme” or who are members of Healthcare Regulatory Bodies." 2. Better support for viable but loss-making businesses CBILS, as it currently stands, is not working for loss-making companies. Banks are lending to businesses “if they would have lent to them last year” and this, effectively, excludes loss-making business from the Scheme. What we suggest is that The Treasury loosens the rules around SEIS and EIS investments for the full 2020 / 2021 tax year in order to allow a wider uptake of such schemes and allow equity investments to support viable but struggling loss-making businesses. In summary, we suggest: An increase in SEIS relief to 70% and EIS to 50% A doubling of the amounts that individuals can invest in the scheme during the 2020/2021 tax year A relaxing of the SEIS / EIS eligibility rules in consultation with Trade Bodies such as COADEC, Capital Enterprise and The UK Business Angels Association Nic Conner, Rangewell’s Head of Research said: “A loss-making business is not a bad business. Often they are investing heavily in growing market share, rolling out a concept or building world-leading technology. We cannot let Conoravirus wipe out a generation of our young and fast-growing businesses - they are the future of UK Business. Many businesses can’t or don’t want to take on more debt at this time - by tweaking the already extremely successful SEIS and EIS rules, the Government can quickly provide support to thousands of viable businesses who currently can’t access the CBILS Scheme.” 3. Open the CBIL Scheme to a much wider range of lenders In our Open Letter to the Chancellor last week, we noted that Banks have been reporting that they are currently swamped with applications and will simply not be able to deal with the large number of SMEs who will need to access the scheme. However, we believe that the High Street Banks and Mainstream Lenders are doing their best to work within the government system at a time when the demand for finance has grown. These lenders have seen a huge demand for CBILS whilst, at the same time, their offshore processing offices in places such as India are closing due to lockdowns. This means that the workload has been put on an understaffed UK team who are struggling to deal with the scale of enquiries. We believe that The Treasury should open the CBIL Scheme to a much wider range of specialist, fintech and private lenders with immediate effect. The lenders in question are already regulated, have strong credit, risk and back-office systems, work alongside multiple government agencies already and are keen to support the CBIL Scheme as quickly as possible. Nic Conner, Rangewell’s Head of Research said: “We are calling on the government to widen the range of lenders who can access the scheme with immediate effect. Britain has the most active and diversified range of lenders in the world, many of whom emerged from the lessons of the last financial crisis. These lenders, and many others like them, already work alongside government agencies to diversify the source of funding to British SMEs and they stand ready to help and support SMEs through the CBIL Scheme. If The Treasury opens the scheme up to fintech platforms and specialist lenders then this should release much of the volume pressure on the High Street Banks and Mainstream Lenders.”
Coronavirus – are you covered?
Your claims adjuster may argue that your business interruption cover does not apply The coronavirus crisis has spread confusion as well as a justifiable fear. With thousands of people affected across the UK, businesses have been forced to close, lockdowns are in place, and we are living under stricter rules ever seen in peacetime. It is a frightening time for everyone – but if you have a small business to run, there could be severe financial symptoms from the pandemic. Your business may lose revenue for several reasons. Even if you are not forced to close, customers might not come in and staff may be reluctant to expose themselves to risk. There could be a loss of supply chains, people may be unable to travel to meetings or events, or you may experience delays or changes to the service you’re able to provide. You might even face additional expenses such as increased staffing costs, the need to make special delivery arrangements and additional costs required by hygiene safety rules. In some cases, you may be denied access to your business by a police or council edict. Of course, you may have business interruption insurance to deal with the losses and the costs – but will you actually be able to make a claim? Will your business interruption insurance cover you? The simple fact is that your standard insurance policy is unlikely to cover you for loss of income or revenue due to coronavirus. The Association of British Insurers has warned that most businesses only purchase standard commercial insurance policies which provide cover against day to day risks including damage caused by fire, flood, theft and accidents involving employees. No-one saw the coronavirus crisis coming. If it is not specifically mentioned, your loss adjuster may suggest that you are not covered for it. But read your policy closely. Some policies may have a Notifiable or Communicable Disease extension - but each claim will need to be dealt with on the merits of the specific policy wording. The first may relate to the cause or ‘trigger’ of a claim. Normally BI policies apply when there is damage to property or premises and payment is made for that “material damage”. There are extensions to the cover available, commonly referred to as ‘contingent BI’ covers. These cover notifiable disease and prevention of access due to the order of a competent authority. These may extend to your Business Interruption cover so that, if you have to shut your business or there is a communicable disease at your premises, you may be covered for loss of revenue. Cover for notifiable diseases Sometimes referred to as ‘infectious disease’ (or similar), this cover is typically provided in two forms. The first lists diseases which are covered in the policy. By definition, only diseases which existed when the policy was written will be included. This means that coronavirus will be excluded. The second provides cover for loss resulting from notifiable diseases - at the premises or in the vicinity. Interruption resulting from the occurrence needs to be proved to make a claim - it is the impact on the business that is insured against, not the disease itself. This provides the best chance for making a claim. The Government registered COVID-19 as a notifiable disease in England on 5th March. The Department of Health and Social Care had stated that “this will help companies seek compensation through their insurance policies in the event of any cancellations they may have to make as a result of the spread of the virus”. But you may still struggle to get a payment with some insurers. Insurers have, in the past, paid claims that were technically not covered. Terrorist events are one obvious example. With a spate of claims in the offing, the impact on insurers from the coronavirus will be dramatic, and it is to be expected that loss adjusters will argue that cover is not applicable – to avoid creating a dangerous, and costly precedent. Cover for loss of access However, there may also be a claim to argue if you cannot access your business. BI cover is available for damage in the vicinity which prevents access to or the use of the premises – such as a road that is closed, or even things like a bridge being out of use. It may also cover prevention of access by the authorities. Wordings usually require the restriction to be imposed by a local or term ‘competent’ authority. As with the notifiable disease extension, the loss must flow from the prevention of access for cover to apply. If your business is in one of the sectors closed by government decree, you may have a valid claim to pursue. Other grounds for claims Some BI policies have supplier or customer extensions. These are sometimes poorly defined and might be argued to apply if your supply chain is affected. If you cannot trade because you cannot bring in stock because your supplier is locked down, you may have cause for a claim - but it might be more difficult if there are territorial clauses which exclude suppliers on the other side of the world. How can you get help? You may find that you are in conflict with the view of a claims adjuster, and it may not be entirely cynical to suggest that some insurers will tend to delay making a payment for as long as possible. This could place your business in a very difficult position, unable to generate revenue, and unable to claim the cover which you believe that you have paid for. At Rangewell, we may be able to find solutions designed to help you deal with the short-term cash flow issues. If Covid-19 is causing you losses, and your insurer seems reluctant to help, we may be able to secure the funding you need in the form of short-term funding – which can help you stay afloat until your insurer pays, or until you are ready to start trading profitably again. At Rangewell, we are expert in all types of business finance, and we can help you find the funding that's best for you - whether it is a problem with an insurer or any other business purpose. During the current crisis, we can provide the quickest way to find the funding you need. Call us now – our experts are ready to help you with your finance problems during the coronavirus crisis. We understand the pressures you are under – and our service is absolutely free.
Coronavirus – and your clients’ cash flow
Coronavirus is a threat not just to human life, but also to your clients' prosperity The global shutdown is presenting challenges to every business. But it is particularly challenging for SMEs, who may not have the resources of a large firm to weather out the storm. Whether customers are not coming in, clients are suddenly not calling, or the production floor is silent because of a lack of staff or supplies, the effect can be the same. The business grinds to a virtual halt, and the first sign that these matters are becoming serious can be your SME clients’ short-term cashflow. Many accountants are now seeing a similar picture - one that has appeared so suddenly that most clients are completely unprepared. Just a month ago, it was business as usual in most sectors, with the coronavirus hardly hitting the headlines. By the middle of March, shops were closing and factories falling silent. Many thriving businesses have found that their income streams have dried up virtually overnight. Now, the focus for most businesses - and their accountants - is getting a grip on short-term cashflow at a time when revenues seem to have fallen off a cliff. Then, when the client realises the depth of the problem when their income has effectively been turned off, the next step is to looking at the options that can help effectively preserve cash and keep business afloat in these uncharted waters. Clients need to know exactly how much cash they have to call on and then how long they can make it last. You need to look very carefully at your client’s operations, see where economies can be made – and at what sources of income are still open to them. What savings can be made? Most businesses will have stock that can be liquidated in normal times. These times are far from normal, and it is unlikely that cash can be raised by a fire-sale approach. Letting staff go may be unwise - especially at a time when the government is keen to preserve jobs by paying 80% of workers' wages. The only saving that might be possible in the current market may be to refinance existing financial commitments - where Rangewell can help find solutions. But you may need a more radical approach. The government can help The government first introduced its surprisingly generous support measures for businesses during the budget speech on March 11. However, as stricter social distancing measures rapidly became needed, the government has taken further steps to support the economy. The government has deferred VAT payment from March 20 until June 30. Deferred VAT is then to be paid by the end of the 2020-2021 tax year The VAT deferment concessions may have the biggest immediate impact on helping your clients cashflow - and their prospects for survival. The VAT bill is one of the big regular costs for all SMEs. Being able to preserve that cash - earmarked for the taxman - within the business can provide an immediate cash injection. HMRC will not charge interest or penalties on any amount deferred as a result of the Chancellor’s announcement, but VAT returns will still need to be submitted in the usual way. A 12-month business rates holiday for all retail, hospitality, leisure and nursery businesses in England Business rates are another constant drain on your client’s resources. The rates holiday will free up additional cash, particularly as it can be accompanied by small business grant funding of £10,000 for all small businesses in receipt of small business rate relief or rural rate relief. The HMRC Time To Pay Scheme will allow your clients to avoid late payment penalties if they need to pay late because of coronavirus If you believe your clients will have trouble paying a tax bill that they are already liable for, you may need to contact HMRC without delay. The new Coronavirus Business Interruption Loan Scheme - CBILS This is aimed at helping small and medium-sized companies keep in business by allowing them to borrow up to £5m at preferential rates through the British Business Bank on repayment terms of up to six years. The scheme provides the lender with a government-backed, partial guarantee (80%) against the outstanding facility balance, and there is no guarantee fee for SMEs to access the scheme. Interest and fees will be paid by Government for 12 months - the Government will make a Business Interruption Payment to cover the first 12 months of interest payments. Under CBILS, clients that were trading profitably before the crisis in any sector can apply for a loan, with the intention that the government’s involvement will allow lenders to make a positive decision. You may need to remind clients that, while several of the government’s initiatives are given in the form of grants or deferments, CBILS loans are also a major part of the response, and could be a key aspect of a rescue package designed to keep their cashflow positive. You should ensure that your client is aware of the potential they have for providing the cashflow support they need. You need to be certain that your clients have potential for a viable business after the crisis before recommending a loan. CBILS supports a wide range of business finance products, including Term Loans, overdrafts, Invoice Finance and Asset Finance. You need to be certain that the right facility is used - and that the most competitive loan is secured. However, this can be a challenge. The lending market is in a state of flux because of the crisis - and securing the most cost-effective and the most appropriate finance can be a challenge that lies outside your usual expertise. The solution is to call us at Rangewell At Rangewell, we are specialists in business finance. We help all types of business access all types of funding - and we are rapidly establishing ourselves as the experts in funding for businesses affected by the coronavirus crisis. If your clients come to you with a cashflow problem caused by the coronavirus, or other urgent funding need, call us 020 3637 4150 - or email [email protected], and our experts will work with you to find the solutions you need. We can discuss CBILS and CCFF, and the various other funding options available - and help you to give your clients the support they need at this challenging time. Our service is free - both for you and for your clients.
Property lending and the Coronavirus Crisis.
The coronavirus has affected every aspect of life - and business - in the UK and the property sector is no exception. Some deals have been put on hold, while others seem to be running to a very different pace as the professionals and resources required are tied up by the lockdown. But while the volume of enquiries has decreased over the past week or so, there are still deals going through – and inevitably there will be still some new opportunities arising, some of which will need to be acted on quickly. Residential investment and redevelopment opportunities may come to the fore while most types of commercial property transactions may take a back seat. This means that there is still a need for property finance. Commercial Mortgages, Development Funding and many other types of finance are still being sought – and at Rangewell, as experts in property funding, we look at the challenges you might face in securing the funding you need. Getting a valuation Valuers have joined the rest of the UK on lockdown amid the COVID-19 crisis. With fewer valuers and quantity surveyors willing or able to visit sites, property lending has inevitably slowed down – or even threatened to grind to a halt. However, getting a valuation is always a key step in the funding process. In normal times, an inspection of the premises is a vital contribution to taking that step. But of course, these are not normal times, and it may be impossible to get a site visit booked. The good news may be that - while site visits may be difficult to arrange, and considered by some valuers to be in conflict with the government's initiative to stop the spread of infection - it may still be possible to arrange the valuation you need for a property project. Obviously, we are in unprecedented times, and with the market turned upside down, getting the best possible advice by experienced local professionals has become even more important for a funding application. An experienced valuer who knows your local market may be able to rely on their knowledge and expertise to be able to give an opinion on value. In many cases, they may already know the property and will be able to use this knowledge to arrive at a market valuation. Surveyors and valuers may well be on lockdown, along with most of the rest of the population, but they can use desktop valuations to arrive at workable figures. At Rangewell we know that physical inspections will not be mandatory for some of our lender clients. Some will be prepared to progress an application, armed only with a market-based valuation from a respected valuer. See the latest lender and existing borrowing developments with Lender Support But are all lenders lending? Lenders always take a long-term view of property lending, which can mean timescales based in decades with many products. Some are, therefore, understandably unsure about the market over the next few months and years. The economy will take a battering, at least in the short term, and this may increase the risk of many types of lending. Some lenders are looking back to the property price falls of the financial crisis of the last decade. But the crash was an economic crisis, and COVID-19 is a health issue with very different economic effects. This means that the commercial property market could recover much quicker once the virus has been contained or a cure found. At Rangewell we have already seen a number of lenders temporarily halting new loan applications. Some will not be looking at any new applications until the lockdown is over, while others are working to understand the effects of the crisis, and may be prepared to lend once they have reconsidered their appetite for risk, and the new market realities as the situation develops. The possibility that there will be no sales market in the short term may mean that lenders must anticipate holding on to any asset for a longer period than usual in the event of default. This may prompt some of those that are still prepared to lend to only do so at low LTV ratios. What can you do? If your property deal looks in danger of stalling because of your lender's policies, or their confusion about what those policies should actually be – or if you are ready to buy a property and have not yet started your lending applications, the answer is the same. Call us at Rangewell. We are determined to continue to support UK businesses though the pandemic – and we are in constant contact with lenders throughout the market. We know those that are still able to lend, and the kind of finance deals they are able to offer. Bridging for short-term deals will certainly be available, especially if you are able to find a surveyor who is able to do more than a drive-by valuation. Longer-term funding may be more difficult to find, with an uncertain market ahead – but, at Rangewell we know the lenders who are best-placed to find the funding you need. Whether your property funding has stalled or whether it is a new opportunity that needs a new solution, call us, and our property funding experts will be ready to look at the entire market to help you secure the funding you need. Call us at Rangewell on 020 3637 4150 - or email [email protected] Our service is free.
What can you do if you are turned down for CBILS?
Businesses across the UK are taking steps to reduce the risk of coronavirus to staff and customers through a series of practical measures. Social distancing is vital – as is taking extra precautions to ensure surfaces remain clean and asking customers to use contactless payments instead of cash to reduce the risk of contamination. But even though you may be working to keep your premises and staff - and customers - safe, self-isolation means that it is inevitable that there will be less business done. If customers don’t come in - and if suppliers are not supplying and deliveries not being made - you could find yourself in a cashflow crisis and your business on the brink of disaster as a direct result of the coronavirus. It's not all bad news Help is available - the Government announced the launch Coronavirus Business Interruption Loan Scheme, or CBILS, from 23rd March. You may be able to borrow up to £5m through the Scheme. This is a loan guarantee scheme that provides financial support to smaller businesses that have lost revenue and are potentially facing a cashflow crisis as a result of the COVID-19 outbreak. It provides loans that will be interest-free for 12 months, with the government promising to underwrite 80% of the loan should a business fail following the crisis. If a lender can provide finance on normal commercial terms they will, with that loan usually supported by a personal guarantee from the company directors. If not, the lender can decide whether a business can be supported by CBILS and seek to use the scheme to alter a negative credit decision. To be eligible the business must: Have a UK base Have a turnover of no more than £45 million per annum Be in an eligible industrial sector Have a sound borrowing proposal - but insufficient security to meet a lender’s normal requirements Have not received state aid above €200,000 over past two years The criteria for borrowing are flexible. Lenders have been instructed to judge applications by the business’s previous performance, which means that if you were running a successful business before the crisis, you could be well placed to request the funds you need now. The scheme is a part of a wider package of government support for UK businesses and employees, and applies to business loans and other types of finance such as overdrafts, Invoice Finance and Asset Finance. You can apply to the commercial lenders who will be working with the government to provide the funds yourself – or call us at Rangewell to get our expert support. But you must remember, this is a loan like any other, and you will need to repay it, even if it is interest-free for the first 12 months. What’s more, the guarantee from the Government only covers 80% of the total lent, so the lender will still be taking a risk on the remaining 20%. If they don’t feel that your business is a good risk, they will not be prepared to make the advance you need. It is still early days yet for the scheme, which has been rushed through to help deal with the emergency. This means that the and full details of how it will work are not fully understood. There have also been questions asked, perhaps if you are not able to clearly demonstrate the impact of the COVID-19 outbreak on your business for instance. There have also been concerns over how widely it is likely to be available, and whether it will be simple and fast enough to provide the lifeline that businesses need now. So what can you do if you cannot secure funding under CBILS? Rangewell can help At Rangewell, we are specialists in business finance - we find all types of funding for all types of business. In the current crisis, we are helping businesses of all kinds find the funding they need with lending backed by CBILS. Naturally, there are delays getting through to some lenders – and more delays while they set up the internal systems they need. Our direct contacts to key decision-makers in the leading banks participating in the CBIL scheme can help fast track your application, possibly saving you the frustration of waiting weeks for a decision, and potentially bringing you the funds you need in time to save your business. But we are committed to helping all the businesses that come to us if we can – and we know that even if you find that you don't qualify or are declined for funding under the scheme, there may still be other forms of business finance for which you may still qualify. Receiving a decline under CBILS may be a setback – but it does not have to be a disaster for your business. We can help you secure a wide range of business funding, including: Cashflow support funding - to provide a reserve of cash to tide your business over when income is reduced - as it will be currently. This will usually take the form of a short-term, unsecured loan designed to be paid back when trading improves. Revolving Credit Facilities allow you to borrow and repay funds as required, much the same as an old-style bank overdraft. A Revolving Credit Facility can be a simple way to increase your financial flexibility, allowing you to withdraw the cash as you need it, and with no changes when you do not. Asset Refinance - can help you raise cash by releasing it from assets - which can include equipment or vehicles that you have already acquired. Asset Refinance works by you sell the asset to the finance company in return for cash and then buy it back with an HP agreement, giving you the chance to borrow the money you need at a rate that is low because of the security provided by your assets. Commercial Mortgages of your business premises can be used in a similar way to Asset Refinance to raise large capital sums. Invoice Finance - when business is slow, getting paid fast becomes all the more important. Invoice Finance provides an immediate cash payment by the lender when you invoice a customer or client for work done, no matter how long it takes for them to pay. Getting professional help with your finance needs At Rangewell we help secure all types of funding for all types of business – and during the current crisis, we can provide the quickest way to find the funding you need. Call us now – our experts are ready to help you with your finance problems during the coronavirus crisis. We understand the pressures you are under – and our service is absolutely free.
Coronavirus: What financial support is available to your small business?
The coronavirus pandemic has hit companies of all kinds, and many - from pubs and restaurants to small manufacturers - have been forced to shut their doors. This is unavoidable, even if your sector is not one of those closed down by the government. Customers are not coming in and many staff are opting to stay at home to avoid the potential of infection. Materials and stock may be hard to source with many suppliers already in lockdown. But whether or not you are actively trading, you will need an income to keep your business viable. There will still be some bills that need to be paid – and as a small business, you are unlikely to have the cash reserves you need to handle them yourself. The position is changing on an almost daily basis, but at Rangewell we have drawn up a quick guide to grants and government support that are currently available, and the funding options that may still be available from the commercial finance market. Small business? Local grant funding could be available If your business currently qualifies for Small Business Rate Relief (SBRR), a grant of £10,000 will be paid automatically by the local council. This is should be automatic. You don’t even have to apply for this grant. Your local authority is scheduled to contact you in the early part of April with the details of what you are entitled to and payment should be made shortly after. If you have any questions about whether you will qualify for this grant, you should contact your local authority. You should find details of their preparations for SBRR on their website, and there should be someone at the council who can help you over the phone. Retailer? You could be in line for a larger grant Retail businesses are particularly vulnerable in the current crisis. Retail businesses are not simply shops, but restaurants, cafés, drinking establishments, cinemas and live music venues and others where business depends on the presence of customers. The lockdown means that those customers are simply not coming in – and will be unlikely to return for months. This would usually spell disaster for the businesses that are now standing empty up and down the country – many of which were already suffering as customers deserted the high street for the internet for many types of shopping. If your retail business has a rateable value between £15,000 and £51,000, the local council grant could rise to £25,000. As with the small business grant, no action is required. Your local authority should be in touch in the next few weeks with further details. The Coronavirus Business Interruption Loan Scheme - CBILS If for any reason you don’t qualify for the grant or believe it may not be enough, you may be eligible for the Coronavirus Business Interruption Loan Scheme (CBILS) and may be able to borrow up to £5m through the Scheme. This provides financial support to smaller businesses that are losing revenue and seeing cashflow disrupted as a result of the COVID-19 outbreak. It provides loans rather than grants – but these loans will be interest-free for 12 months, with the government promising to underwrite 80% of the loan should a business fail following the COVID-19 pandemic. Lenders have been instructed to judge applications by the business’s previous performance and future viability. They are advised to look at current issues ‘sympathetically’ which means that if your business was successful before the crisis, they should provide the funding you need. The scheme is a part of a wider package of government support for UK businesses and employees. You can apply to lenders directly – but at Rangewell we are ready to help provide the help you need to secure the funding you need. Coronavirus Job Retention Scheme Your wage bill is one of the largest costs you are likely to face. Laying off staff is unfair and will bring negative publicity but, fortunately, you may be able to take advantage of the Coronavirus Job Retention Scheme to protect the jobs of workers who would otherwise be laid off during the crisis. With the scheme, the government will pay 80% of these wages. This will initially be for three months, although extending the scheme has not been ruled out. Further details are to be released, although, for your staff to qualify, you must classify them as a ‘furloughed worker’ and notify HMRC through a portal, which is currently under development. You will be able to apply for the funds as soon as the service is ready and backdate your claim to the beginning of March - it is up to you whether you pay the remaining 20% of your worker’s wages. Borrowing the money you need The government’s funding schemes are unprecedented and could provide a lifeline to many businesses. But you may find that they cannot provide all the funding you need – particularly if your business is ready to grow or develop. Fortunately, there is still the usual range of commercial lending solutions which can help. In the current emergency situation, some lenders are reconsidering their positions - and some have even withdrawn from the market until conditions become more predictable. At Rangewell, we know the lenders who are still ready to help with your funding needs. Some of the key types of lending that may be important in the next few weeks and months include: Cashflow support funding Cashflow support can provide a reserve of cash to tide a business over a spell when income is reduced - as it is for most enterprises in the current market. These usually take the form of a short-term Unsecured Loan. Unsecured business loans don’t require a charge over a property, while secured loans do. Cashflow loans can be arranged on the following basis: Borrow from £1,000-£500,000 – or up to £5m through the Coronavirus Business Interruption Loan Scheme (CBILS) Terms from 6-60 months Complete in 5-7 days – even faster with some lenders Revolving Credit Facilities Revolving Credit Facilities - also known as Overdraft Replacement - allow you to borrow and repay funds as required. They can be a simple way to increase your financial resources, giving you the cash you need while you need it, and with no changes when you do not draw down funds. Some things to be aware of with Overdraft Replacement include: Some revolving credit facilities may qualify for CBILS Completion can take place very quickly, in 2-4 days with some lenders Asset Refinance Where your business owns solid assets, from tooling to kitchen equipment, you can use Asset Refinance to raise finance against them. These facilities can work much like a loan, or as a sale and leaseback. You release the investment you have made in the asset to use again – and they can provide a particularly cost-effective solution for your financial needs. As security is offered, you can expect a lower rate than those offered through an unsecured loan These facilities can often be completed in 7-10 days Commercial remortgages Commercial Mortgages can be used in a similar way to Asset Refinance to raise capital, although in this case, the asset is your business premises. Very large sums can be available, often up to 70% of the market value of your premises. The rates offered are usually very low Terms are available up to 25 years Commercial mortgages can take around 8 weeks to complete, and may not be ideal where funds are needed urgently. An alternative is a Bridging Loan which can be used to provide finance -although costs will be higher. Getting professional help with your finance needs At Rangewell we help secure all types of funding for all types of business – and during the current crisis we can provide the quickest way to find the funding you need. Call us now – our experts are ready to help you with your finance problems during the coronavirus crisis. We understand the pressures you are under – and our service is absolutely free.
Tracking how lenders are responding to CBILS Applications - ensuring transparency and spotting problems early
As we highlighted in our Open Letter to The Chancellor last week we’re hearing from the High Street Banks that they’re already swamped with applications and will not be able to deal with the large number of SMEs who will need to access the scheme. Rangewell have had conference and video calls with our senior contacts at the High Street Banks and numerous other lenders over the last fortnight and every lender we have spoken to is putting immense effort and substantial resources into implementing the Coronavirus Business Interruption Lending Scheme (CBILS) as quickly and efficiently as possible. We are updating our Full list of COVID Loan / CBILS Providers and their criteria as new information comes in and, from conversations to date, it is interesting that: Almost all lenders are being quite explicit they are only working with / prioritising current borrowers Some of the smaller lenders on the scheme have very limit resources and / or do not have capital to deploy. We believe that most lenders will act responsibility but we also believe that a transparent and independent overview of how lenders are responding to CBILS applications will help identify problems quickly and inform government quickly of “issues on the ground”. With this in mind we are asking businesses who have applied to the Coronavirus Business Interruption Lending Scheme (CBILS) for support to contribute to our anonymous survey HERE - we are keen to get positive feedback from all borrowers as well as from those who have experienced difficulties. All information provided will be treated confidentially and not shared with anyone (unless you request otherwise) and the information provided will allow us to provide regular aggregated overviews of lender performance here and directly to The Treasury and other national and local government departments.