Financing update: Covid-19

Our update following yesterday's announcements (17 March)

Given the fast moving and ever changing Covid-19 situation, the government continues to make the right noises to support companies and individuals in the coming weeks and months.

Yesterday (17 March 2020), the Chancellor announced £330bn of loans on attractive terms to businesses.  This includes the business interruption loan scheme which will offer facilities of up to £5m to SMEs. Whilst he mentioned that he anticipated that both schemes would be up and running by next week, we note that historically these securing financing through these types of arrangements has not been particularly quick. We will update this information, as we receive more information as to how these facilities can be accessed.

In the last 24 hours we have rung around the lending community to discuss their perspective in the current environment and see how they expect to support governments new initiative. We are most focused on the practical aspects to secure these new facilities.

The government is also making grants of up to £10,000 to the smallest business, once again the details as to how to access these will be forthcoming in the coming period.

coronavirus impact on busienss FAQs

The key headlines from across the board are:

  • Lenders will review opportunities on its merits. The view is that if Covid-19 is the reason for the financing requirements for an otherwise viable business, they will look at these favourably.
  • Existing relationships will help the lending process, as a positive history will substantially assist in the internal proposal process.
  • Applicants will still be required to submit forecasts and more importantly an action plan as to what they are planning to do to reduce the financing requirement.
  • Lenders will expect management to shoulder some of the financing requirement.
  • They are awaiting further details for delivering the government backed business loans. The existing lending and compliance frameworks are too cumbersome for the current lending climate.
  • For existing facilities, Banks are looking to support and likely to offer significant flexibility where possible.

It is clear the lending community are playing catch up with government announcements, and therefore it can be anticipated that it may take some time for the results to trickle through to companies.

Notwithstanding this, getting ready for what you need to do and therefore how much financing you may require as early as possible will put you in a better place to weather this particular storm.

For more information

For more information on financing options available, please contact either:
Anu Tayal or Chris Brazier, or call us on:

01483 416232