Will your Bounce Back Loan see you through?

Will your Bounce Back Loan see you through?
by David Marshall

The saying ‘cash is king’ has never seemed more relevant and some businesses may find themselves in the unexpected position of having “surplus” cash available just now.  It’s important to ensure that you have a full understanding of the position that your business might find itself in as the Government and other business support is reduced or withdrawn.

Over the last couple of months, businesses have had access to Government interventions such as deferring HMRC payments, business rate holidays, the furlough scheme and grants. In addition, rent, loan and other finance payment holidays may have been agreed and need to brought up to date.  The government-backed Bounce Back Loan Scheme (BBLS) has been an ‘easy to access’ option, offering borrowers a 12 month window without repayments and with the Government covering the first 12 months interest.

Clearly cash flow patterns have changed and it’s important to produce a cash flow forecast now and update it regularly to ensure that the deferred and any new loan commitments can be serviced.

If cash flow pressure is anticipated, it is still possible to apply for CBILS (Coronavirus Business Interruption Loan Scheme) support, but this must be used to repay any BBLS, in addition to providing new working capital.

In addition to the High Street Banks, a number of other Lenders are now offering CBILS.  These Lenders may be able to help, even if you have previously been declined a CBILS from your own Bank.

Contact Sterling Capital Reserve to discuss your cashflow needs.