CBILS rush on the way?

Coronavirus, Finance, Planning,

New research by MarketFinance suggests CBILS applications will increase dramatically in the coming weeks. If there is any chance you might want to apply, now is the time to do so!

What does the research show?

The research findings are based on a survey of 5,000 UK companies with a minimum turnover of £250,000. The study was conducted in November 2020 (after the announcement of the second lockdown) and found the following:

  • Over a quarter (27%) felt they would not survive to see 2021, based on their current cash balances, and anticipated a reduction in revenue over the winter months.
  • A further 34% were uncertain, but if cash flow improved and they had an exceptional end to the year, felt their business may survive.
  • Only 27% were certain about survival. Older business owners and those based in London and the south east were the most optimistic.
  • Small business owners reported a cash injection of, on average, £52,800, would help them see through the winter trading period.
  • Two in five businesses (42%) are still waiting to be paid for work completed since the first lockdown. In June 2020 they were, on average, waiting for £148,917, reducing to £33,906 in September. At the time of the research the average amount owed was £27,134.
  • Two-thirds of businesses reported waiting longer to be paid. One in five (20%) reported their payment terms have been renegotiated to three months or more. Businesses in Wales and those in the leisure, marketing and telecoms sectors are having to wait longest.
  • As businesses get paid later, half (49%) are in turn withholding payments to suppliers, fearing cashflow worries and future economic shocks.
  • A third of businesses (35%) reported they’re intentionally stockpiling cash to safeguard their business over the winter trading period.

Of the businesses surveyed, 84% said they would be applying for a CBILS loan.

They aim to use these funds to protect them in case of another round of lockdowns, and in anticipation of unexpected bills, or the impact of Brexit early in the New Year.

Why are CBILS so popular now?

More businesses have realised that they can use a CBIS loan to repay their Bounce Back Loan and add an additional amount, as long as they can borrow to that level of course!

Many business owners didn’t realise that this was an option, having applied for the maximum £50,000 Bounce Back loan amount when they first became available, when CBILS were so difficult to get hold of.

Additionally, many businesses applied for a Bounce Back loan based on the level of funds they thought they would need to survive the initial Lockdown. Few imagined at that stage how long the disruption would go on for!

Also, banks didn’t necessarily have or make the time to understand the way a business worked when they were frantically processing CBILS applications earlier in the year. Several clients we’ve spoken to really struggled to explain to the bank that they really needed the loan, despite the fact that they had cash in the bank at the time. Those same businesses are now stating to draw those funds from their accounts, as their lengthily pipeline, and cash flow, is drying up.

What does the lending landscape look like?

Things are changing dramatically, as so much has done, as a result of COVID. During a recent conversation with one of our finance contacts, there is a lot of movement, and in areas you wouldn’t necessity expect. Here are a few examples:

  • Non-CBILS lenders are coming back to the market, with some unusual offers.
  • Revolving credit facilities are becoming popular, and are extremely flexible if you can access them.
  • Overdrafts are being removed by the banks, which is of course NOT helpful!
  • A 30 year business facility, where the first part is interest only, is brand new to the market. This requires a portfolio of property, but is an indicator of the breadth of some of the newer options.
  • Invoice Finance is changing quite a lot.
  • Debtor Book finance, a very different solution to invoice finance, is helpful where a business runs with a large and fluctuating debtor book, and a facility isn’t needed all of the time.
  • Regional Funds are now eager to get funds out to businesses, and are looking for growing businesses who need finance. Funds available range from £50K to £1m, but many peak at £250K. Accessibility and requirements vary between locations.
  • Start-up loans remain an option for, unsurprisingly, new start businesses. You can apply for these online BUT success is far more likely using an expert to support the process. We’ve heard that applying through the portals gets you absolutely nowhere in 8 weeks, by which time you can have the funds working for you.

CBILS applications close on the 31st January 2021, so if you haven’t checked your cash position and forecast how that will look beyond the end of 2020, now is the time!

As ever, if we can help, please get in touch. None of us knows how long the restrictions and lockdowns may go on and if you take the funds, you can repay in up to 12 months with nothing lost.

There will be no equivalent source of such affordable finance beyond 31st January, so don’t miss out!


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