COVID-19: five point-plan
Looking at the government's package of support for businesses, our business managers Adam Berger and Jim Fletcher have put together a five-point plan to help you get the financial support you need.
1. Check the latest support from the government and your local authority
Most people will have checked the government site by now, but have you been checking it regularly for updates? The government’s business support helpline is live on 0300 456 3565, and there are useful FAQs that have been published.
Your local authority in East Sussex is now starting to be able to accept applications for small business grant funding. Visit your local council's COVID-19 support page daily as the application systems go live, links below:
Eastbourne and Lewes District Council
Hastings Borough Council
Rother District Council
Wealden District Council
For some businesses, the solutions available may mean you may not even need to consider applying for CBILS. We advise businesses to check everything available first before taking out a loan.
Alternative schemes you may consider include deferred VAT and Income Tax scheme or the Coronavirus Job Retention Scheme (CJRS). You may also wish to access HMRC’s ‘Time To Pay’ call HMRC’s dedicated helpline: 0800 024 1222.
2. Reduce and investigate your outgoings
Jim Fletcher, business manager, Locate East Sussex, has written a clear blog post on how to reduce or change your outgoings. Here are his main tips:
Talk to your landlord - if you haven't already, ask if they will suspend or cancel any rent that is due or going to be due.
Talk to your bank/lender - they should understanding of your situation and may help you find ways to reduce, defer or cancel some of your outgoing payments
Talk to your insurance broker - if you have insurance, there is no harm in finding out what can be done or be covered and escalate your call rather than rely on their website
Talk to your clients and/or suppliers - they may well be in a similar situation to you, and willing to consider alternative ways to fulfil commitments without incurring significant cost
Chase up debtors - it may be possible that some companies will be willing to pay their commitments early but there may have to be a trade-off margin for cash. Always chase up outstanding amounts.
Find innovative ways of funding your payroll - if short term capital is the problem, talk to HR or your HR specialist to find solutions
Change your business practice - consider more upfront payments to cover your costs and liabilities
Look at your machinery, equipment and vehicles - Is all of your equipment necessary? Can you sell assets or cancel the lease on the equipment you use?
3. Cash Flow Forecast
If you have investigated and actioned the previous two points, right now you need to create a very detailed cash flow forecast for the next three months. Consider all outgoings, however small and which are business critical. Stop all others. Be realistic about what cash you will receive from your customers.
Since the current market situation is uncharted for many businesses, we would recommend that you also look at the possibility of drawing up a longer term cash flow forecast as best you can.
If you feel you need to ask for funding support (CBILS or otherwise), you need to prove that any loan you take out will help but also that you can pay the loan back when the dust settles.
If you are struggling to form a cash flow forecast, we recommend you check out the Start-Up Loans free template for a comprehensive overview.
4. Go to your existing business bank
The British Business Bank is working closely with most of the major banking providers and they will have more favourable rates on the market for CBILS. The loan provider will be covered for up to 80% of the loan from the government but remember, you as the business is always liable to pay back the loan.
Many of the smaller providers may take on more risk and be willing to lend a smaller amount of capital, but this comes with a higher rate compared to your own bank.
5. Search the British Business Bank Accredited Lenders
If your own bank is unable to deliver CBILS or has declined your application, you can search the British Business Bank’s website for other lenders. Its website has a lot of useful information about applying for CBILS and finding a provider that will be able to suit your needs. And if your bank can't help you, Let's Do Business Finance in Hastings is one of the 40+ accredited lenders.
You need to have a good relationship with your lender, as the responsibility to pay off the loan is going to be up to your business, and they can help you through the process.
If you need any advice or help, the Locate East Sussex team is available to help and guide you through this process.