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What To Do If You've Been Refused A CBILS Loan

Posted 1 months ago

What To Do If You've Been Refused A CBILS Loan
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To combat the economic effects of the Covid-19 pandemic, the government unveiled an unprecedented support package to help businesses survive these difficult times. The headline component was the Coronavirus Business Interruption Loan Scheme (CBILS). 

However, despite the government’s commitment that banks would remove their overly stringent affordability checks on these to open up borrowing to companies who would otherwise not qualify, Nextfin has reported on how, still, a huge number of businesses have still found themselves being refused when applying.

What are the problems with CBILS?

One of the key points of contention with the Scheme is the timescale involved. The application process appears to be far more elongated meaning getting money into companies is not as quick in comparison to many other types of funding. This was borne out in April where 300,000 businesses had made informal enquirieis, but did not receive funding. 

As a farily new scheme in high demand, there have been severe delays, not only in applications being processed, but also for directors who are simply seeking initial advice on the scheme.

With many business owners spending hours on the phone waiting to speak to an adviser, this amounts to precious time being wasted which could be put to better use as directors across the country are working flat-out to secure the future of their company.

Nextfin has reported previously how CBILS has fallen well short in terms of its performance and ability to deliver the £300bn made available to businesses in need. 

Refused? What are the alternatives?

A CBILS rejection doesn’t mean you won’t be able to secure any funding. Every lender will have their own, unique lending criteria which outlines who they will and will not lend money to. 

Some lenders will be more risk-averse than others, requiring proof of a long and profitable trading history before agreeing to lending. Others will be more open to offering finance to newer companies or those which are yet to turn a substantial profit; these lenders are more likely to assess businesses on a case by case basis rather than through a set criteria. 

If you’ve been refused, fill in our application form and we may be able to help you. 

HMRC and Time To Pay Support

With cash flows taking a sustained hit, companies will be faced with the uphill struggle of juggling various bills that need to be paid. You may be able enter into a payment plan known as a Time to Pay (TTP) arrangement, which would give you the time and space to clear your arrears through a series of monthly instalments. HMRC are much more agreeable with their terms during this pandemic. 

Cashflow support funding

This provides a reserve of cash to tide your business over when income is reduced - as it will almost certainly be during the coronavirus pandemic. This funding will usually take the form of a short-term, unsecured loan which is designed to be paid back when trading improves. 

Revolving credit facilities

Revolving Credit Facilities allow you to borrow and repay funds as required, much the same as an old-style bank overdraft. A Revolving Credit Facility can be a simple way to increase your financial flexibility, allowing you to withdraw the cash as you need it, and with no changes when you do not.  

Asset refinance

This can help you raise cash by releasing it from your assets - which can include equipment or vehicles that you have already acquired. Asset Refinance works by selling the asset to the finance company in return for cash and then buying it back with an HP agreement, giving you the chance to borrow the money you need at a rate that is low because of the security provided by your assets.

Debt crowdfunding

This can be attractive to businesses seeking an alternative lending route for businesses which have been unable to raise finance by banks or credit unions. Speed is the greatest advantage to the borrower, with fast decisions and release of funds often possible. Interest rates and terms will vary depending on the crowdfunding platform and the amount borrowed.

Bounce Back Loan Scheme (BBLS)

Thousands of small firms and sole traders – including high street staples like hairdressers, coffee shops and florists – will be eligible for 100% government-backed Bounce Back Loans to help them make it through the coronavirus outbreak.

For more details on what other routes are available for your business during coronavirus, visit our dedicated coronavirus guide. 

Author: Sacha Bright & Oliver Murphy


To the best of our knowledge, the information we have provided is correct at the time of publishing. Sacha Bright is not a solicitor or accountant and we recommend that you seek professional advice on any topic discussed.

Tagged: Coronavirus CBILS Loans Business Finance

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