It’s been a tough few months for businesses and the level of support is constantly changing, so we caught up with Jamie Baggaley, director at J&J Commercial Finance, to discuss the impact of COVID-19 and the financial options available
COVID-19 impact on businesses
The UK government has brought out a raft of schemes to help businesses and individuals and continues to review these and launch new ones.
We’ve been supporting businesses with their cash flow and helping them to navigate the support, from looking at forbearance, grants, VAT deferral, and furlough through to the Coronavirus Business Interruption Loan (CBILs) and Bounce Back Loan (BBL) Schemes.
While a few of these schemes didn’t get off to the best of starts, and left some businesses highly frustrated, the speed at which they were released and the demand meant the few accredited lenders involved were overwhelmed.
Coronavirus Business Interruption Loan Scheme
The scheme was announced in the Chancellor’s March budget and set to launch a few weeks after. Having worked in the banking industry for several years, I know launching a new product in a short time-frame is a very demanding task, especially with banks affected by reduced workforces.
CBILS started with 40 lenders and now has more than 60 and it’s been great to see those new lenders offering fast decisions and funds to successful applicants. The scheme covers business loans, invoice financing, asset finance and revolving credit (overdrafts), and businesses can use a combination, across several lenders if required.
Bounce Back Loan Scheme
Again, a product that needed to be delivered quickly, with some lenders reacting better than others. The legislation changes for this scheme are reminiscent of the time of self-certified mortgages. A quick application, with a few declarations for business and individuals to accept and then the money is in your account hopefully within days (not weeks!). This has certainly helped several businesses access funding fast.
How have J&J Commercial been supporting businesses?
We have continued to offer our free service, and have been undertaking a three-step support process:
Cash Flow
The starting point with all clients. This could be reviewing existing cash flow or helping create a forecast from scratch. We base this on what ‘normal’ should look like for the business and overlay the impact of COVID-19, generally resulting in lower sales or delays in invoices being paid.
Government Schemes
We work through the vast number of schemes and identify those available to the client. We review VAT deferral, furloughing, grants, and forbearance first to see if these schemes alone will improve cash flow. If pinch points remain, we look at CBILs or BBL.
Other Lending
If after exploring all the government schemes the business still needs additional funding, we work with our existing panel of lenders still active in the market and operating their usual products to help pull together an application.
Why should a business seek advice?
It’s important for businesses to be aware of the implications the schemes could have. A current concern we are raising with our trade bodies is businesses who applied for BBL because it was quick and easy to access, but this is locking them out of CBILS where they could have potentially received a higher amount of funding.
We also want to ensure businesses are supported for the long-term particularly where they have supply chains, so they can release cash within the supply chain quickly and also that it’s protected.
For a free review of your business finances with J&J Commercial please contact Jamie Baggaley on 07399 660 002 or email Jamie.Baggaley@JJCommercialFinance.co.uk.
