On 6th April the Recovery Loan Scheme was launched. Replacing the Bounce Back Loan and CBILS the new scheme is designed to support businesses in need of growth funding. We look at how the scheme works and how it could benefit your business.

As businesses focus on getting back on track no one can ignore the level of debt firms accessed in 2020. We review a report from UK Finance which lays bare the extent of debt businesses have taken on and how some owners are beginning to worry about their ability to start repaying.

To close this Bulletin, news from Metro Bank on a new addition to their mobile banking app. The function will allow users who don’t wish to use an online accounting software package to create their own branded invoices.

If you would prefer to listen to the podcast version you can click below or download to listen to later via our Soundcloud, Google, Spotify, Stitcher or itunes channel.

Here also is the transcript of this edition of the Business Finance Bulletin

In this Bulletin, the Recovery Loan Scheme launches. Could it help you get back on the path to growth? Businesses, borrowed a record amount in 2020, but now it’s payback time. And Metro bank helps its clients manage cashflow better by launching a new invoicing tool. All of this in the latest Business Finance Bulletin

Recovery Loan Scheme Launches

Well, finally, the Recovery Loan Scheme has been launched. On the 6th of April lenders opened the doors to applications under this new Recovery Loan Scheme. This scheme of course, is a replacement for CBILs and Bounce Back Loans, which closed for applications on the 31st of March. So will this new scheme allow you to get back on the path to growth? Well, let’s take a look at what the scheme entails.

First of all, if you’re looking to borrow via an overdraft facility or a loan, the starting application amount is £25,001 up to a maximum amount of £10 million. If you’re looking for finance via asset finance or invoice finance, the starting amount is as low as £1,000. Again, up to a maximum of £10 million. How long can you borrow for? Well, for an overdraft or an invoice finance facility, you can have that over three years. For loans and asset finance, the maximum term is six years. So a good lengthy term in which to manage your monthly repayments.

So what can you use the money for?

Interestingly, the scheme says you could be eligible to apply if you’ve been impacted by COVID. Now it doesn’t say negatively impacted by COVID, so the implication is, of course, if you’re one of those businesses that has boomed in the pandemic, you’ve seen a surge in sales, you may need additional working capital, buy new machinery, or plant and equipment. That means you will be eligible under the scheme. So it’s a much more positive forward looking scheme other than like CBILs and Bounce Back Loans, which is very much about survival money. The new scheme is about growth money.

In terms of the interest rates, that’s still now being capped at 14.99%, including all of the fees that the lenders will be charging. So at least there is an upper cap, but lenders of course, will be free to set their own interest rates.

Now, in terms of repayments, unlike CBILS and Bounce Back Loans, you have to start paying from day one. In fact, your first payment wILL come one month after you’ve drawn down the loan. So you have no moratorium here and you were responsible for all of the costs on a day one. So a good scheme, and it only lasts until the 31st of December. You really need to be very focused and get your applications in.

At the moment as I record this, there are only 18 lenders who have been accredited by the British Business Bank. I know there are other lenders in the pipeline looking to apply, and this compares to over a hundred lenders across the CBILs and Bounce Back Loan scheme. There’s probably not going to be as much appetite amongst lenders to support this scheme, but still it would be a good variety of lenders for you to choose from.

If you want to know more about this scheme and how it can work for you, always happy to have a chat, just drop us an email info a business loan services dot co dot uk

Business Borrowing in 2020

On many occasions over the last 12 months, I’ve highlighted the fact that businesses have had an insatiable appetite to borrow money. It’s not surprising given what’s going on with businesses, just needing funds to keep going or to plug the cash flow gaps. Well, this demand for finance has been highlighted in a new report from UK Finance.

UK Finance is a trade body for all of the UK lenders and it’s reported in its latest Business Finance Review that in 2020 lenders said that they lent new money, new money out the door, totaling £63.6 billion; just under £64 billion of new finance arrangements. Now that’s a staggering figure on its own. However, compare that to the new loans they issued in 2019, a normal year. Well, the increase in 2020 was 162% on the previous year. Yes, a 162% jump in new financial arrangements. So it just shows the level of that the businesses have now taken on.

In fact, the report highlights that a quarter of business owners are now saying they are beginning to panic a little bit, because these repayments are obviously going to be starting now during April, May and June for the majority of businesses. So they realise now the level of that, that they’ve taken on, which has to be paid back.

Now, this new debt that’s been taken on, not only is it new money, but it’s also diverted it from other financial products as well. The Finance and Leasing Association, for example, have just released figures to the end of February, 2021, which shows a demand for asset finance, being leasing and HP volumes fell in the 12 months to February, 2021 by 24% compared to the previous year in February, 2020. So it just shows a combination of two things. The demand for asset finance generally has fallen because businesses just weren’t investing. But also there’s an element of the fact that they had CBILs and Bounce Back money. And so it didn’t need to access asset finance facilities.

So we can see there’s a lot of problems that are going to be facing businesses during this year, as I’ve mentioned in the previous segment, we’ve got the Recovery Loan Scheme, which may help plug further gaps, but of course, we’ve now got this huge lump of debt, which needs to be paid back.

Metro Bank Invoicing Tool

Over the last few years we’ve seen a rapid increase in the number of businesses that are using a large variety of online accounting software packages designed to make accounting that much easier. Well, not really. They’re very small businesses out there who perhaps don’t want to get tied into a monthly subscription, or really just don’t do large volumes to justify the cost of packages. Well, Metro bank has recognised that, and this and has now announced that it’s launching an invoicing tool to sit alongside their mobile banking app.

If you’ve got an account with Metro bank, and you don’t do large volumes, you can now create an invoice within your mobile banking app. You can create an invoice, assign it to a particular customer, assign it in terms of one of your particular products or services, and also even branded up with your logo. So you’re going to issue the invoice direct via the app.

The customer receives it. They pay you back into your Metro bank account, and then you can reconcile you invoice versus what you’ve had paid back in. It will allow you then to keep track of your cash flow and more importantly, chase those people who haven’t paid.

So it’s a great idea for Metro bank for those smaller businesses who don’t want the all singing, all dancing, accounting software packages. If you want to know more about that, you can find out more from the Metro bank website, which is www.metrobankonline.co.uk/business. A great, innovative idea from Metro bank.

Closing

Well, let’s it for another Bulletin.

I hope you enjoyed watching and listening to it. And if you did, please, don’t forget to give it a like, a share and subscribe to this channel. So thanks very much. Look forward to being with you again, next time.

We devote the whole of this week’s Business Finance Bulletin to the new Recovery Loan Scheme.

In his Budget last week, the Chancellor announce that CBILS and the Bounce Back Loan Scheme would not be renewed but instead would be replaced by the Recovery Loan Scheme.

We look at features of the new Scheme; the key differences between it and CBILS and the Bounce Back Loan; and the actions you should take now in terms of the 31st March deadline for the existing schemes and preparation for the Recovery Loan.

If you would prefer to listen to the podcast version you can click below or download to listen to later via our Soundcloud, Google, Spotify, Stitcher or itunes channel.

As the application deadline to apply for a Bounce Back or CBILS loan fast approaches, there is talk of a new government-backed loan being announced in this week’s Budget. Focusing more on recovery than survival we consider what the features of the loan could be.

Smaller, local businesses have been badly hit over the last 12 months. We look at a pilot scheme launched by Barclays Bank in four UK towns. The Rebuilding Thriving Local Business programme designed to equip small business owners with the skills to restore their businesses.

To close, a review of the latest Lloyds Bank monthly Business Barometer survey which reveals that business is slowly edging up to highs not seen for nearly a year.

If you would prefer to listen to the podcast version you can click below or download to listen to later via our Soundcloud, Google, Spotify, Stitcher or itunes channel.

What is the business borrowing environment going to look like post Bounce Back Loans and CBILS? Opening the latest Business Finance Bulletin, we look at why obtaining finance will be challenging once the government loan support schemes finish.

After two years in the making, seven of the major banks have launched the Business Banking Resolution Service. The service provides a path for small businesses who want an independent body to review complaints they have against their bank.

Wrapping up this edition, if you deferred your VAT payment due between March and June 2020, we look at HMRC’s announcement that it will be opening up applications to pay the amounts due over 11 months.

If you would prefer to listen to the podcast version you can click below or download to listen to later via our Soundcloud, Google, Spotify, Stitcher or itunes channel.

Kickstarting this latest Business Finance Bulletin, we review the changes announced to the Bounce Back Loan scheme. The tweaks to the scheme will help those small businesses which are seeing a slower uptick in trading than hoped for.

Those businesses trading in Europe are finding it a challenge to negotiate the new rules and regulation. Recognising this, the government will be launching the SME Brexit Support Fund, which will provide grants to businesses in need of support and advice.

To wrap up this edition, research from EY ITEM Club has revealed the level of debt businesses took on in 2020 and how the amount is significantly higher than seen in previous years.

If you would prefer to listen to the podcast version you can click below or download to listen to later via our Soundcloud, Google, Spotify, Stitcher or itunes channel.

Changes are being made to the Bounce Back Loan repayment terms which will ease cash flow concerns for many businesses.

We look at the options the government are offering to help relieve the repayment burden.

The Insolvency Service has reported on the number of firms which entered some form of insolvency arrangement in 2020. Opening this Bulletin, we look at why the numbers are lower than 2019 and how the tidy is beginning to turn.

We look at the latest CBILS and Bounce Back Loan figures which reveal that demand for the support loans are still strong. The figures also show that topping up an existing Bounce Back Loan has proved popular.

To wrap up this edition, we review a report from Small Business Britain and TSB focused on the actions small businesses have taken to become more resilient in 2021.

If you would prefer to listen to the podcast version you can click below or download to listen to later via our Soundcloud, Google, Spotify, Stitcher or itunes channel.

With 2021 being the year where managing cash flow will be more important than ever efforts to reduce instances of late payment are always welcome. We open our latest Business Finance Bulletin with changes announced by the Prompt Payment Code which will see its members reduce the number of days taken to pay invoices.

If you are purchasing a commercial property which is subject to VAT then payment can put a strain on cash flow. We look at a new short-term loan launched by Just Cashflow which can assist in the up-front VAT payment.

To close, we review new analysis from the British Business Bank which reveals the top three regions which have taken advantage of the CBILS and Bounce Back Loans.

If you would prefer to listen to the podcast version you can click below or download to listen to later via our Soundcloud, Google, Spotify, Stitcher or itunes channel.

This edition of the Business Finance Bulletin is a Bounce Back and CBILS fest! We kick off with the news that following a raft of new restrictions the government has extended the application deadlines for all the loan support schemes.

The swift roll-out of the Bounce Back Loan scheme has been criticised by the Treasury Select Committee stating that the balance between protecting taxpayer’s money and supporting business is wrong. We look at what their concerns are.

To close, a review of the latest Bounce Back Loan and CBILS figures which show continued growth and demand from businesses in need of cash support.

If you would prefer to listen to the podcast version you can click below or download to listen to later via our Soundcloud, Google, Spotify, Stitcher or itunes channel.

This episode is devoted to developments within the CBILS and Bounce Back Loan government support schemes. Given the ongoing economic problems, we kick off with a look at the Chancellor’s announcement that the CBILS and Bounce Back Loan application deadlines have been extended. Is it time to re-look at your borrowing requirements?

We look at the latest figures from HM Treasury on how much has been borrowed from the two main support schemes. The amount of money borrowed is a significant sum and signals a tough 2021 for many businesses when it comes to repaying these loans.

To close this Bulletin, we consider some of the unintended consequences of the CBILS and Bounce Back Loan schemes in term of future availability of finance and capacity for businesses to borrow.

If you would prefer to listen to the podcast version you can click below or download to listen to later via our Soundcloud, Google, Spotify, Stitcher or itunes channel.