More than £17bn of funding has been handed out via the British Business Bank’s accredited lenders under the two Coronavirus Business Interruption Loan Schemes, CBILS and CLBILS, with many print businesses already benefiting from the government-backed finance.
The CBILS scheme is set to close to new entries at the end of September, with the CLBILS variant, which is for larger companies with sales of more than £45m, set to close to new entrants on 20 October.
There has been speculation that the closing dates could be extended by the government after it indicated that it will make an announcement on the schemes next month.
However, industry finance experts have urged print bosses not to miss out on the attractive finance packages available, which can be used to support cashflow or to fund capex that will help firms adapt their operations to changed market conditions.
CBILS covers firms with sales of up to £45m and offers funding up to £5m. CLBILS is for businesses with sales greater than £45m, with loans of up to £200m available.
The finance can be provided in the form of term loans, overdrafts, invoice finance, revolving credit facilities, and asset finance.
David Bunker, director at Compass Business Finance, described the end of CBILS as “the biggest story in print in 10 years”.
“We’re seeing a dramatic increase in enquiries. Once CBILS is gone people are going to be asked for a 10% deposit and you won’t just be able to walk into a bank and get a £750,000 term loan,” he stated.
“Because of the nature of the CBILS scheme it offers direct help to companies in the printing industry that are capital intensive and working capital tight, and in a flux about technology.
“It’s going to be a mad rush as the scheme closes. Life after CBILS is going to be interesting.”
Based on current information, CBILS applications have to be submitted to accredited lenders by 11:59pm on 30 September (11:59pm on 20 October for CLBILS).
Roger Aust, managing director of the print division at Close Brothers Asset Finance commented: “Since we became an accredited lender, we’ve continued to support customers in a wide variety of ways, utilising CBILS to raise working capital and creating headroom in hard-pressed cashflows and, of course, funding investment for the future.
“We would strongly encourage anyone interested in exploring how CBILS can assist their business as we emerge from C19 to complete their applications as soon as possible. The scheme is only intended to run until 30 September.”
After applications have been filed, lenders will have a set window of two months after the closure date to process the applications, but will not be able to accept any new applications following the schemes' closure dates.
Once approved, firms then have until the end of March 2021 to take up the finance offer, or they can decide not to take up the facility.
Lenders will have a set window of two months after the closure date to process these applications and conduct any checks they need to carry out to enable them to offer a facility. Lenders will not be able to accept any new applications following the scheme closure date.
“People are realising as they look at the next 12-18 months’ capex and working capital requirements that there is still some uncertainty, and people are being prudent,” Bunker added.
“I remember when the Regional Growth Fund finished. This is a big alarm bell – get in there and get your act together before it’s too late.”
The loans are interest-free for the first 12 months and sums of up to £250,000 do not generally require personal guarantees. Bunker said that “most” term loans for larger amounts have also not required guarantees.
Based on the latest statistics issued earlier this month, the British Business Bank business support schemes – including CBILS and Bounce Back Loans – have delivered more than £52bn of loans to businesses with more than 1.2m loans approved.
