The impact of the restriction on movement is having an enormous impact on cashflow for a number of businesses and for a number of reasons.
The Government announced the temporary coronavirus business interruption loan scheme (CBILS) on 23 March to provide businesses with access to funding to help see them through the period of restriction on movement. Full details on the scheme can be found on our dedicated COVID-19 webpage here.
As of Tuesday 14 April, 6,020 loans worth £1.1 billion had been approved under the CBILS which equates to 21% of the formal applications made. The number of informal enquiries was over 300,000.
As yet, we have not seen any of our farming and rural clients using the scheme. For the majority of farming clients it has been, to a certain extent, ‘business as usual’. However, some of the more diversified business have been hit and we have seen a number of occasions where income and cashflow have been stifled.
Businesses offering meeting facilities, holiday letting and wedding venues have had their income source suspended, initially for a three week period and now for a further three weeks. One client had 36 weddings postponed on the first phase of restrictions. However, it does not stop there. Understandably people aren’t booking holidays or weddings now, so no deposit income is forthcoming.
What we are seeing with this type of business is their banks being open to agreeing a 12 month capital repayment holiday on existing loans. We have also seen other institutions such as PCP finance on cars allowing a three month repayment holiday.
If you are struggling with cashflow and require additional finance, it is worth speaking to your existing bank first as they know the history of your business. If this fails, then other lenders registered under the CBILS can be approached.
We have put together some cashflow tools to help you understand your cash requirements, these can be found here . Alternatively, if you would like some help, please do get in touch with one of the Farms and Estates team.