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What the CBILS End Date Means for Your Business

March 5, 2024
Andrew Knowles

Is your business cashflow still battling to recover from the impact of the COVID-19 pandemic?

The unprecedented disruption to doing business, which began in March 2020, still has firms reeling from the impact. Customer buying patterns have changed, many more people are now working from home and many supply chains remain uncertain and inconsistent. The UK exit from the EU has brought additional short-term challenges.

Against this background of both global and national upheaval, it's no surprise that your business cashflow remains under pressure.

Government support for businesses is changing

The Coronavirus Business Interruption Loan Scheme (CBILS) closed its doors to new applicants over six months ago, at the end of March 2021. The CBILS arrangement offered a lifeline to thousands of firms which, without the scheme to prop them up, would have collapsed. The combination of CBILS and the furlough scheme for employees has allowed many previously profitable companies to weather the pandemic storms.

Unfortunately, the ending of CBILs, and now the cessation of furlough funding on 30 September 2021, has presented businesses with real cashflow issues. Particularly for companies that took out CBILS over 12 months ago and are now being asked to start making repayments.

How CBILS worked

CBILS was for businesses with a turnover of under £45m. It provided:

  • Finance of up to £5m.
  • Business loans, overdrafts, invoice finance and asset finance.
  • Repayable over 6 years.
  • 12 months of interest-free loans.
  • No repayments in the first 12 months.

With the cessation of CBILS, business owners are now seeking alternative forms of finance.

Cashflow pressures on businesses today

The end of major government support programmes has not coincided with a return of 'business as usual' for most firms. The economy in the closing months of 2021 is very different from that two years ago, before the pandemic struck.

Customers are not buying in the way that they used to. The trend towards online shopping, both for day-to-day essentials and for big ticket items, such as cars, has rapidly accelerated. Concerns about social distancing mean that many now avoid crowded environments.

The rise in the numbers working from home, even on a part-time basis, has changed both travel and buying patterns. People now budget for a home office in a way they'd never done so before. Both employees and employers are reconsidering the location and size of the buildings they need for living and working.

These changes are impacting the revenues of businesses that developed to serve an economy different from the one we have today. It takes time to adapt, particularly when it's unclear whether new patterns of buying and working are here to stay.

On top of all these changes, many businesses are being squeezed by supply chain issues. The pandemic closed down factories worldwide. As demand picks up again, these gaps in production translate into product shortages. For example, the construction industry is grappling with shortfalls in essential materials such as timber, concrete and electrical components.

The closure of ports during the pandemic has created a backlog in shipping, which is pushing up delivery costs.

In the UK, the transition out of the EU has layered new challenges on business supply chains. A shortage of truck drivers is pushing up costs and slowing down delivery times. Other industries that relied on workers from overseas are also finding it harder to fill job vacancies.

All these factors are adding to the cashflow challenges facing UK businesses at the moment.

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CBILS replaced by the Recovery Loan Scheme

However, it's not all bad news for firms looking to raise affordable finance and meet their contractual obligations. The CBILS and other pandemic support programmes may have closed, but they have been replaced by the Recovery Loan Scheme (RLS).

Key features of the Recovery Loan Scheme are:

  • Businesses can borrow up to £10m.
  • No personal guarantee required on arrangements under £250k.
  • Finance terms of between three months and six years.
  • Scheme includes term loans, overdrafts and invoice finance.

A business can apply for RLS finance even if it's already taken funds under the Bounce Back Loan Scheme (BBLS) or the CBILS arrangement.

How you could put the Recovery Loan Scheme to work in your business

With the CBILS end date now firmly in the past, and the economy starting to move back to something like normality, this is a good time to consider the benefits of the Recovery Loan Scheme for your business.

As the name implies, this finance is designed to help businesses like yours to build back to where they would have been, had the pandemic not hit so hard. CBILS helped many firms avoid insolvency and closure, while RLS is all about building foundations for future growth.

With RLS funding you could:

  • Develop a marketing strategy to increase market share.
  • Invest in innovation.
  • Train your staff, particularly those coming off furlough.
  • Secure your working capital position.

The Recovery Loan Scheme could present a valuable investment opportunity for your business. However, we recommend that you take professional advice before entering into any arrangement.

Speak to us before taking RLS finance

We work closely with banks and other finance providers, many of whom are providing the RLS funds. Our team have extensive experience in helping business owners find the finance that's best suited to their particular situation.

Every business is in a slightly different position, with regard to its assets and liabilities, profitability and potential. We help match your circumstances with a finance provider well suited to serve you. While every business is different, we've worked with others in a similar situation to your own, helping them to find a solution that satisfies.

Whatever your borrowing needs, and whatever your credit record and future plans, we'll help you find a way forward.

Join the many growing businesses that have taken advantage of our services as a finance broker. Get in touch with us today.

Jamie Davies
Managing Director

As a founder of multiple businesses, Jamie believes that mindset, discipline and ambition are key drivers for success, both for his businesses and for his clients. 

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Disclaimer: Spark Finance Ltd (Registered office - 18 John Stow House, London, England, EC3A 7JB, Registered Number 10128297) helps UK firms access business finance. Spark is a credit broker, not a lender. Any quotes provided are for information purposes only and subject to status and separate lender terms and conditions. Applicants must be aged 18 and over.  Guarantees and Indemnities may be required.  Spark Finance may receive commission from lenders  which may vary depending on the lender, product, or other permissible factors. The nature of any commission model will be confirmed to you before you proceed.

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