Struggling businesses and SMEs being denied access to CBILs: cbm’s response

Struggling businesses and SMEs being denied access to CBILs: cbm’s response

Banks have been under fire in recent days, with SMEs reporting that they have been denied access to Coronavirus Business Interruption Loans (CBILs). This scheme was introduced with the aim of ensuring that UK companies can access necessary money as the UK lockdown slows the economy. However, many small businesses have reported they cannot access CBILs, and instead face long delays, high interest rates, personal guarantees, being offered regular finance products by banks, such as overdrafts and standard business loans.

Chancellor Rishi Sunak stated two weeks ago that businesses would be able to walk into bank branches and discuss CBILs of up to £5m to help them survive the COVID shutdown. His promise being that "any good business in financial difficulty who needs access to cash to pay their rent, the salaries of their employees, pay suppliers, or purchase stock, will be able to access a government-backed loan, on attractive terms".

Banks claim to be following the rules set out by the government, however thousands of SMEs in the UK have claimed they have been denied help or deemed ineligible and therefore are not able to access the money they need to survive in this climate. This is because firms can only get the emergency loans if they can't borrow in a normal commercial way, like borrowing against the value of a property. However, this is not a ‘business as usual’ situation. SME’s were promised interest-free, fee-free, government-backed support from banks and this is not reported to be the reality. 

Research from a network of accountants suggested that nearly a fifth of Britain's small and medium-sized businesses are unlikely to get the cash they need to survive the next month, under the existing scheme.

It is therefore unsurprising that banks have been highly criticised. It is clear, and widely argued, that banks need to step up and help small and medium-sized businesses survive during the coronavirus pandemic. 

The Chancellor is expected to imminently announce a fresh wave of action to help companies hit by coronavirus. 

As a team, cbm are monitoring the situation, with a view to seeing what we can do in support of businesses securing CBILs. 

Possible solutions we may be able to offer include helping businesses demonstrate the disruption caused to their businesses by COVID-19, working with SMEs to create business cases for securing CBILs as well as looking ahead to the future, working together to create plans for CBIL repayments, as we exit the COVID situation.

We are awaiting updates from the government on their next steps, from here we can start to review what we can do to help businesses get the finance they need, and are entitled to, in these unprecedented times.   

All our help can now be delivered through our new video-based consultancy service, enabling us all to comply the government’s current COVID-19 advice. Visit our CBILS page here to find out more and please do not hesitate to contact our expert team using the form on the right or by calling 01604 420 420. 

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