** This is a fast-moving situation, so we'll update this post every week with new information as it becomes available. **
Whilst we’re currently living in uncertain times with Covid-19, there are a bunch of steps you can take to limit the impact on your business. As the situation evolves, our government, banks and lenders are stepping up to the mark, offering new initiatives to support their customers through the crisis. Below we’ve detailed some of the best ways you can maximise your cash during Covid-19.
Approach your business bank for an overdraft
If you’ve not got one in place already, we’d recommend you approach your business bank for an overdraft. This gives cash availability, just in case, and it’s something to fall back on. It’s also worth remembering that the earlier you talk to your bank, the sooner they can help.
For Barclays customers, their broader support package for businesses currently includes 12-month capital repayment holidays on existing loans over £25,000, increased new overdrafts and working capital solutions, and an existing £14bn lending fund launched in 2019 to help SMEs build resilience in uncertain times.
TSB are also offering their business customers repayment holidays for new loans (but bear in mind that this will result in more interest overall). They can also waive their standard arrangement fee on overdrafts, term loans and any credit limit increases or renewals if your business is impacted by Covid-19.
As for as other banks go, there is currently little information on changes to business overdrafts during Covid-19 (but we’ll update this post as and when we find out more!).
Consider applying for a government-backed loan
The Coronavirus Business Interruption Loan Scheme (CBILS) offers loans of £25,000 to £5 million for SMEs through the British Business Bank, including Invoice Finance, Term Loans, Asset Finance and Commercial Property. You are eligible for the scheme if:
- your business is UK based, with turnover of no more than £45 million per year
- your business meets the other British Business Bank eligibility criteria
It’s worth bearing in mind, though, that this is a rigorous application process, and every bank will look for security and personal guarantees from you.
It's also worth noting that we don't expect this borrowing to be a quick and easy way of raising cash. If you require funding quickly, please check the section below.
If you’re looking to access CBILS term loans, you should contact your bank directly, as long as they are within the scheme. If your bank is not in the scheme, such as Starling for example, we can work with you to help you access funds from a high-street lender using CBILS.
A number of private lenders are also making funds available to small businesses impacted by Covid-19, including £2 billion from Lloyds Banking Group, £5 billion from NatWest and £7 billion from Barclays
Explore Alternative Lenders
Whilst there are currently 41 lenders offering borrowing under the CBILS scheme (above), there are hundreds of alternatively lenders that can assist with short term cash flow solutions.
You can explore these in more detail on our Funding page (linked below)
Negotiate repayment holidays where you can
It might be worth approach people you owe money to, such as suppliers, equipment finance providers and landlords to see if they will offer a repayment holiday. In any case, asking for help early is key. It’s better to be the first person to ask for a repayment holiday than the hundredth person!
Collect all overdue payments from customers
This might prove difficult, but collect all outstanding balances from customers that are due. (This might be difficult as other businesses will likely be using step 3 above!)
Take advantage of Mortgage Repayment Holidays
On 17 March, banks agreed with the Chancellor to offer those that are struggling a temporary 3-month break from mortgage payments. From a personal perspective, if your personal credit score won’t be affected, it may be worth looking into this, as it keeps more cash with you. It’s worth noting, though, that these are voluntary agreements with banks, so it’s not compulsory for them to offer you a mortgage holiday. If you’re concerned about your current financial situation, we’d recommend getting in touch with your lender sooner rather than later to see if this is a suitable option for you.
Need more advice about maximising your cash?
We can help! At Complete HQ, it’s more important than ever for us to help businesses thrive. We’re here to provide support and reassurance and we believe we can overcome this, together. We can explain the government backed loans in more detail and help you raise finance, advising on the best options for you and your business. Just book in for a call with us and our team will help you navigate the situation.