MarketFinance: CBILS demand set to soar

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Demand for the government-backed Coronavirus Business Interruption Loans Scheme (CBILS) is set to soar as business’ Bounce Back Loans (BBLs) dwindle and cash flow dries up, according to MarketFinance.


For those the businesses that applied for a Bounce Back Loan during the summer, they will now have only £3,150 remaining, which is estimate to only see them through to the end of this week.

Since the announcement of the second national lockdown, MarketFinance found that 84% of businesses planned to apply for CBILS loans to protect them over prolonged lockdown measures and in anticipation of more bills, taxes or duties to pay.

In addition, more businesses know they can refinance their Bounce Back Loan with a CBILS loan – up from 68% two months ago to 83% today.

Anil Stocker, CEO of MarketFinance, said: “The stop-start government announcements on lockdowns haven’t helped UK businesses.

“However, they continue to fight on and will, naturally, require more funds to bolster them through a tricky winter period. Looking ahead, ultimately, it will be the private sector which will enable the Chancellor to get the country’s finances back under control, so business leaders will be looking for some pro-growth, pro-enterprise stimulus measures in time to come.”

Two in five businesses (42%) are still waiting to be paid for work completed since the first lockdown; in June 2020 they were, on average, waiting for £148,917, which came down to £33,906 in September, but there is still £27,134 outstanding to them.

Two-thirds of businesses reported waiting longer to be paid. One in five (20%) reported their payments terms from customers have been renegotiated to three months or more.

Businesses in Wales and those in the leisure, marketing and telecoms sectors have been the hardest hit, in terms of longer waiting times to be paid.

As businesses get paid later, 49% are withholding payments to suppliers, fearing cashflow issues and future economic shocks.

Meanwhile, 35% reported they are intentionally stockpiling cash reserves to safeguard their companies over the winter trading period.

Stocker added: “We are witnessing a cash vacuum in the economy. Businesses are waiting longer to get paid and in turn are holding out on payments they owe.

“They are in desperate need of funds and support from the government. A well-oiled engine will keep the economy pumping and small business alive”

Over a quarter (27%) of small businesses felt they would not survive to see 2021 based on their current cash balances and anticipated a reduction in revenue over the winter months.

A further 34% were uncertain, but if cash flow improved and they had an exceptional end to the year, they could make it.

Only 27% were certain about survival in 2020. Older business owners and those based in London and the South East were the most optimistic.

Small business owners reported that a cash injection of, on average, £52,800 would help them see through the winter trading period.

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