CMYUK opens CBILS loans for capex
Friday, June 12, 2020
Wide-format kit reseller CMYUK has secured a partnership that enables printers to access the Coronavirus Business Interruption Loan Scheme (CBILS) to fund kit investments to reorientate their business towards new revenue streams, or increased automation to support workplace distancing.
The business, which supplies wide-format machines from manufacturers including EFI, Esko HP and Mimaki, is working with long-term partner finance specialist Sheppex Asset Finance.
According to CMYUK group finance and operations director Jon Price, as the CBILS application process was simplified and clarified, it became clear that it could be used beyond supporting cashflow and could be a lifeline for businesses looking for bolt-on revenue streams or increased automation.
“As the rules and regulations eased, more and more financial institutions, including people that were funding assets, recognised the opportunity to, rather than covertly use it to finance assets, could overtly use it to finance assets.”
Price said the mainstream banks and first and second tier lenders are now supporting asset purchases through the CBILS scheme and “this represents a significant opportunity for printers to invest, because whilst they still have to go through the normal credit process, the banks have got the initial [government] security behind it, which makes them less risk averse.”
He said that several CMYUK customers were in the process of using CBILS-backed finance to fund kit purchases.
“The [technology] area that we had most interest in early on was Esko [Kongsberg] cutting tables, because suddenly customers had orders coming at them for return to work graphics that needed cutting and they needed more capacity.”
However, he thinks that printers looking to diversify and replace revenue from markets that have been hardest hit by the crisis with new products and services, as well as those needing to increase automation to support worker distancing in printshops looking to maintain productivity with a lower headcount, will increasingly turn to CBILS to back kit expenditure.
According to Price, printers can make multiple successful applications for CBILS loans, provided the total is still below capped amount (see below).
“The problem [as a result of Covid-19) is liquidity, it’s about getting cash into businesses and get everybody trading and paying off their debts and the whole supply chain trading freely.”
“I’m an absolute believer that you should invest in a recession, because if you invest in the bottom then when things pick up you’re in the perfect position to grow quicker than others.”
However, he believes that many business owners don’t realise that CBILS can support kit purchases and the benefits it can offer can be “game-changing” for many.
CMYUK talks customers through the headline process, but then passes them to Sheppex who can then assess the CBILS lending market and match the products available to the customers needs and support them through the application process.
“We all get nervous when doom-mongers tell us the world economy is going to shrink by 15%, but that still means there will be 85% of what there was. And someone has to produce their print.”
Robin East, group director at CMYUK added: “Covid-19 has impacted our industry but we’re supporting it to look to the future. These unprecedented government-backed finance packages make reaching for that future a great deal easier. Investing now, will propel our industry forward.”
Loans available from £25,000 to £5m
No interest or fees payable in the first year
0% to 10% low deposit finance
No personal guarantee for loans up to £250,000
Supported by government-backed guarantee
Loan terms between one and five years
A six year term to be offered on larger purchases
Must have an annual turnover of no more than £45 million
Self-certify that it has been adversely impacted by the pandemic
Must not have been classed as a business in difficulty on 31 December 2019, if applying to borrow more than £30,000