It is now a month since the Chancellor, Rishi Sunak, announced a suite of measures to support businesses suffering from the effects of the Coronavirus pandemic.
The Job Retention Scheme will find its first test this week with the opening of the HMRC portal to submit claims. But its bigger brother, the Coronavirus Business Interruption Loan Scheme has been up and running since the PM locked us all down on 23rd March.
But stories abound in the media of businesses being rejected and facing impending closure and insolvency as a result. So as someone who has already completed one successful CBILS application and is in direct contact with the banks on two more I thought it would be useful to provide a few practical tips from my experience to date.
Before approaching your bank there are a few steps that all businesses should work through. Firstly, make sure you have some up to date management accounts, secondly ensure your cash flow is also up to date and reflects the current change in circumstances as a result of the lockdown. This cash flow should show what savings have already been achieved, not just in terms of the JRS and VAT deferral but also any loan repayment holidays, deferral of finance agreements and other cost savings.
While it is obvious to say, it is important to ensure you complete the appropriate documentation (every bank has different requirements) and provide the correct supporting documentation. The bank will want evidence to support the sum requested and confirmation of the plan to work through the lockdown and return to normal trading.
A properly completed application with professionally prepared supporting management accounts and forecasts is not a guarantee of a successful application but it will greatly enhance your chances. The attached article, “How I successfully applied for the CBILS” is well worth a read.
But if there is one thing that overrides everything, “live and breathe your cash flow” every day. Never has the phrase “cash is king” been more true than it is for all businesses at the moment.
