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.

In the first Business Finance Bulletin of 2021 we open by looking at the latest Business Finance Review from UK Finance which reveals the level of borrowing businesses have taken on in the first three quarters of 2020 and the challenges this will bring.

In 2021 the adage that ‘cash flow is King’ will never be truer. A survey from the British Chambers of Commerce highlights the impact the economic contraction has had on business cash flow positions.

To close, from the same survey, businesses are holding back on investment plans. Are these businesses putting themselves at a disadvantage when the economy picks back up?

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.

Starting this week’s Bulletin, with businesses either back trading or gearing up to open the doors, we look at surveys from Aldermore Bank and UK Finance which reveal how businesses see the next 12 months in terms of borrowing and growth.

The British Business Bank announces accreditation of more new lenders on the Bounce Back and CBILS loan schemes. Are we at the stage where there are enough on the panel of lenders?

To close, we review the latest figures on the two loan schemes and consider why the number of unsuccessful CBILS applications remains stubbornly high.

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.

Opening this week’s Bulletin, we take our regular look at how the Coronavirus Business Interruption Loan Scheme is performing and how the approval rate is on the rise.

The Bounce Back Loan Scheme has been launched and we look at how some banks have been better than others in terms of their processes.

Wrapping up the Bulletin, with firms now planning ahead what changes are they planning to make to the way they do business?

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

We open this Bulletin with an update on the CBILS performance. How are the accredited lenders doing in terms of getting money out to businesses in need of support? Will the launch of the Bounce Back Loans help those businesses which failed to access funding under CBILS?

We look at surveys carried out by Lloyds Bank and Hitachi Capital Business Finance which, not surprisingly, reveal that business confidence has taken a severe knock over the last two months.

To close, on a positive note The Pitch, the start up competition organiser, finds that some people are now turning their thoughts to starting a business.

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

Kicking off this Bulletin, we look at the latest Coronavirus Business Interruption Loan Scheme update from UK Finance which, following a slow start, reveals that the number of loans distributed is now picking up.

One gap in CBILS eligibility has been support for start ups and pre-revenue/pre-profit innovation-focused firms. We review the announcements of a variant of the support scheme for innovative firms and funding specifically for start ups.

Closing the Bulletin, we step back and look at reports on the early economic impact of the Coronavirus. What steps are businesses taking to safeguard their future?

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

Banking fraud continues to be on the rise. To open this Bulletin, we share findings from UK Finance on the level of frauds reported in the first half of 2019. From the perspective of businesses, we look at how you can avoid being the victim of Authorised Push Payment scams.

With Brexit inching ever closer, how prepared are small businesses? We look at a survey from the FSB revealing the state of preparedness of businesses which say they would be negatively impacted by a no-deal Brexit. We also have news from Barclays on a number of Brexit roadshows they are hosting in October and November.

Finally, a look at Starling Bank’s announcement that they are launching an online web portal for their business customers to complement their mobile banking app.

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

After featuring the rise in occurrences of invoice fraud only two Bulletins ago, we open our latest episode with findings from a new survey which demonstrates how this fraud is now grabbing headlines. The UK Finance survey reveals a high lack of awareness of this fraud and how it works. Could you spot whether your money is potentially at risk?

As the uncertainty around Brexit continues, we look at news from Barclays Bank of the launch of its Brexit fund. Designed to provide financial stability, the fund is focused on supporting businesses in all stages of development.

To round off this week’s Bulletin, a new commercial mortgage product has been released by peer-to-peer lender Assetz Capital. The mortgage has been crafted to address the need of commercial property owners and investors who need to move quickly to secure a deal.

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

The Enterprise Finance Guarantee Scheme has been a successful programme to help businesses access finance when they have no security. To open our latest Bulletin, news that ethical lender Robert Owen Community Banking Fund has joined the list of lenders offering access to business finance via EFG.

Following the government’s bailout of RBS in the aftermath of the credit crunch, the first recipients of an RBS-financed £775m fund has been announced. The fund is designed to promote and improve competition in the small business finance market. We look at the first three banks to benefit and their plans.

With Brexit looming, we close with the announcement from UK Finance of a new initiative, ‘Let’s Talk Business’. The campaign is focused on encouraging businesses to engage early with their banks if they are likely to need finance.

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

When compared to the UK’s country peers, we are not as productivity as other economies. To open this week’s Bulletin, we have news of the launch of the Government’s Business Basics Fund. The fund is open to bids from businesses which have ideas to help close the UK productivity gap but need finance to develop them.

The reputation of the High Street banks took a hit post Credit Crunch and to counter this, TSB has committed to a series of Lending Pledges. We take a look at the six pledges and how they are designed to reassure the bank’s business customers that they will be treated fairly.

To close this Bulletin, continued evidence coming out of how business owners remain reluctant to borrow and conditions remain tough. The latest figures from UK Finance reveal a contraction in business borrowing and other indicators show that the general trading environment remains challenging.

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