Business Funding in 2021

It's no secret that 2020 was a tough year for many businesses. Some will now have managed to trade through a difficult period and are now picking back up, but the majority are still looking to plug gaps in cash flow.

Many business owners that took a Bounce Back last year have been encountering the issue that it hasn't been sufficient, but they are already at the ￡50,000 limit and therefore are not eligible for further advances on the scheme.

Business owners that took out a CBILS loan last spring/summer are now facing the prospect of starting repayments, even though the business may have been closed for the majority of the year.

Other businesses have found themselves to not be eligible at all for either scheme and are therefore struggling to make ends meet.

So what are the options for businesses like these?

I have a Bounce Back, but it's not enough, what can I do?

For businesses that took a Bounce Back and have since found it isn't sufficient, you may be eligible for a CBILS loan of ￡50,000+. You must however use the CBILS loan to repay the Bounce Back. Therefore, if you have a Bounce Back loan of ￡50,000, and you are approved for a CBILS loan of ￡85,000 for example, you would essentially be getting ￡35,000 of new funds, and in most cases a fresh payment holiday period of 12 months.

The criteria for CBILS is slightly stricter - for example the business must have filed at least one set of accounts, and you may only apply for up to 25% of your annual turnover. Therefore, to qualify, the business must turnover in excess of ￡200,000

If you don't qualify for CBILS funding, then there are other options available which you may wish to discuss with us.

I took out a CBILS loan, but I am now worried about repayments starting soon!

Many businesses that took out CBILS in the spring/ summer of 2020 are now worried about repayments which will begin soon. The good news is there are options available. The most common solution is to organise a 2nd CBILS loan, which will then have a fresh repayment holiday and will therefore ease cash flow concerns. But companies should be aware that this will lead to repaying 2 CBILS loans in a further 12 months time, and you should ensure that it's affordable to do so.

Your business may well qualify for a 2nd CBILS loan, and the easiest way to get an indication as to whether or not it is feasible is to calculate 25% of your turnover in the past 12 months - that will be the approximate figure that you may realistically be able to obtain overall using the CBILS scheme. For example, if you already have a CBILS loan of ￡250,000 and the business turnover is ￡1,000,000 then it would be highly unlikely that the business would qualify for further CBILS. However if the initial CBILS was for ￡75,000 and the turnover of the business is 500k, then there is potentially scope for a further facility of ￡50,000.

There are however other options available on a case by case basis if the company doesn't qualify for additional CBILS loans, and we would be happy to discuss these with you.

I have been declined by several lenders for CBILS, and I don't think I would qualify!

CBILS has been able to help a huge amount of businesses since the scheme began, but not everyone is eligible. However, all lenders' criteria is different, so it's always worth continuing to try until you are certain that it isn't an option. We have had several clients who were declined for CBILS by several lenders before coming to us, and we managed to obtain the funds they required through the scheme.

Once it has been confirmed that you are not eligible for the scheme, there are other options you may like to consider, such as regular business loans, revolving credit facilities or start up loans. You can find out more information about these products on our website, or feel free to get in touch with us for a free business review, and we will be happy to assess what options are available.

Contact information

[email protected]

www.griffithscf.co.uk