Following on from our last news update which covered the impact that COVID-19 is having on businesses and commercial property investment, our Head of Commercial, Andy Elley, explains how you could get finance quicker than the banks may be able to offer it...
Many of our clients are, understandably, trying to speak to their banks to understand what their financial options are to keep their business afloat amongst the severe disruption of coronavirus. Just as we are trying to understand the impact that the COVID-19 measures are going to have on us individually, the high street banks are also trying to figure out how they are going to offer the new Government support schemes to help their clients. This, however, may mean that for those of you who are in desperate need of cash to keep your business afloat, you can’t wait.
So how can Mortgages for Business help?
As an intermediary, we contact lenders through different channels than end clients; this means we may be able to contact them on your behalf before you can.
The general advice for people with existing borrowing is that lenders are looking to support capital repayment holidays, generally for three months, possibly up to six months in some cases.
If this is an option for you, we would need you to provide us with:
- Latest available Management Information (if produced)
- Latest annual accounts
- Details of other steps the business is taking to reduce costs/cash drain
- How the virus is affecting the business
- Last three months bank statements (if the business banks elsewhere)
New Finance Options
For people that want new money to see them through, we have access to the whole of market of lenders, including the specialist business financiers. If your bank can’t help, we might be able to find someone who can.
If this is an option that you want to explore, we will need you to provide us with:
- All the above, plus a six-month cash flow forecast
Coronavirus Business Interruption Loan Scheme (CBILS)
Details of the Governments’ Coronavirus Business Interruption Loan Scheme have just been announced. It outlines what is available for “UK-based” businesses with an annual turnover of no more than £45 million. Your borrowing proposal must be, under normal circumstances, considered viable by the lender and will “enable the business to trade out of any short-to-medium term difficulty” (British Business Bank).
- Loans of up to £5 million
- Repayment terms of up to six years for loans and asset finance facilities. Terms of three years for overdrafts and invoice finance facilities
- Security: depending on the lender, loans of up to £250,000 can be unsecured. Loans above £250,000 are likely to require suitable security (lender dependent)
- The Government will be covering the first 12 months of interest payments and lender fees via a Business Interruption Payment, so there are no upfront costs for businesses accessing the loans
- The Government will provide the bank with an 80% guarantee on any net loss of money lent
We understand that the bank’s public contact points are currently, and understandably, overloaded with people trying to protect their businesses during these uncertain and challenging times. As an intermediary, we have access to other contact routes, enabling us to get through more quickly. This means we can start the process for you, allowing you to focus on other areas of your life that are being affected by COVID-19.
If you are in urgent need of cash flow finance and your bank can’t help, please be reassured that there are alternative options. Please contact our commercial team on 0345 345 6788, and we will work with you to find an option, quickly.