Securing £500,000 with CBILS funding for a Property Advisor
TL:DR Many businesses have been hit hard by Covid. When a specialist property advisor was struggling to afloat, their bank rejected an application for CBILS funding because their application painted a negative picture. At Rangewell, we found a way to reframe the application - and secure £500,000 with CBILS funding.
Funding a lifeline for a property advisor
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 property advisto developers and other organisations with major property interests. The two owners had a wealth of experience in the sector, and were able to offer advice and support at every level, from individual structures to the development of area masterplans, and were recognised as leaders in the field across the area they served.
Their expertise in securing planning permission and professional feasibility studies had allowed them to provide a valuable service, and they were enjoying steady demand - until Covid stuck.
“Covid meant that every project we were working on was suddenly put on hold. Developers were not looking at investing in an uncertain future, and many builders had stopped work on existing projects. That means that although although we had plenty of projects lined up to work on, there was no chance of being paid .”
“We were allowed to work - but our clients were not”
The two partners had built up their business over the years and had established a long list of clients across Southern England. They went into survival mode, stopping any unnecessary expense and taking full advantage of the government furlough scheme to staff. They applied to their 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 and Bounceback loans
Both Bounceback loans (BBL) and CBILS are government-backed schemes to 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. This means they are offered 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.
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..
The funding that could save our client's business?
The partners believed that a bounceback loan would be insufficient for their needs - and approached their bank with an application for CBILS.
They were disappointed to find that the bank rejected their application, giving no clear explanation of why.
“We had not already borrowed heavily in the past, so we were surprised that the bank flatly refused to help. But we knew we needed funding- so we turned to Rangewell.”
At Rangewell d our Covid crisis funding team went to work.
We looked at the scale of their financial commitments and saw that while they needed additional funding to get through the crisis, their business was fundamentally sound - and should have good prospects when the world - and the property industry started to get back to normal.
Then we looked at the application they had sent to the bank - and saw the problem.
The application was professionally written, but had a focus on the downside, painting a very bleak picture of the prospects for the business and the property development sector in general.
If the forecast provided in the document became reality, the entire sector would be in the doldrums for years, and the prospect for the clients advisory business were bleak in the extreme.
We immediately set about re-writing the application - using our knowledge both of the properospects or the property sector and the sensibilities of the bank to deliver a more uptempo view.
We also used our personal contacts within the bank to make sure the revised application received immediate attention.
The solution we arranged
Our revision of the application took into account the current situation for the business - but focussed on the need for their skills, and the type of demand they could expect when the property sector started to recover. The prospects for the business were good - and we believed that there wasa sound case or lending to them under CBILS.
Our approach was successful.
The funding Rangewell secured
500,000 over 60 months 6.5 % 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 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 the options, and work out the most cost-effective ways to provide the funding you want - whatever the challenge your business facest.
We can help you see if a CBILS or bounceback 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.
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@example.com
Talk to Rangewell – the business finance experts