- 20 Apr
Alternative To CBILS If You Don't Qualify
UPDATE: CBILS SCHEME DUE TO CLOSE 31/03/2021 - NEW RECOVERY LOAN SCHEME ANNOUNCED.
If you are looking for an alternative to CBILS, if you don't qualify, or have been rejected, you are in the right place.
CBILS Low Approval Rate
Much has been published about the Government's CBILS (Coronavirus Business Interruption Loan Scheme), whereby companies affected by the virus outbreak can apply for a loan to get them through the difficultes. After a very slow start, an article in the Guardian (19/04/20) reported that of c. 28,000 applications, only 6,000 loans had been approved (that's c. 21%).
Furthermore, we saw reports that there were hundreds of thousands of enquiries within the first few weeks (not all of which will result in an application), which makes the approval rates even more concerning. There are ongoing discussions about ways to increase the appeal of the scheme, but for many who have either not yet applied, have been told they don't qualify or have been rejected or declined, time is running out and financial help is required now.
Alternative To CBILS
I have written previously about my concerns that many UK companies may be "waiting to see what happens", holding off getting the help that they suspect they may need - and this may lead to many running out of cash at the end of this month. This may make future applications much more difficult, once their situation has deteriorated. Now is the time to take action.
Research suggests that many companies don't like the idea of taking out additional debt at this time.
Financing Your Unpaid Invoices
Financing your invoices is a simple way of releasing cash, without taking on the additional debt burden that comes from a loan. With this type of funding, you receive prepayments against unpaid sales invoices, so its money you were already owned - you just get it quicker. You don't end up with a loan that has to be paid back in installments.
Alternative For Poor Credit History
This alternative to CBILS is an option that is widely available from both banks and independent financiers, companies with outstanding invoices are very likely to qualify, and even those with a poor credit history may be able to access this form of finance - you don't need to have been in great financial shape prior to the outbreak. It can also be beneficial if you are worried about the debt burden of taking out a loan.
It fixes the cash flow of companies that are waiting for customers to pay outstanding invoices - you get money released immediately. Furthermore, this type of funding can be in place fast, within a day or two (7 hours is our record), so you can get some peace of mind quickly.
See Also: Coronavirus Business Support Resources.