Topping Up Your Bounceback Loan

Intro
Welcome to the Century Business Finance Hub, with Jon Maloney and Ben Larkins helping you understand everything about business finance, how it works, how and when to apply to make sure you get the right deal. This is the Century Business Finance Hub.

Alex Curtis
Hello, and welcome back to the Century Business Finance Hub. I’m with Jon and Ben, and this time, we’re going to be talking about what you can do next, if you’ve already got a Bounce Back Loan and you need a bit more cash flow. So guys, how you doing?

Jon Maloney
Yeah, good, how you doing?

Alex Curtis
Really good. Really good. So should we should we start there, then what kind of options if there’s obviously these bounce back loans have been, you know, it’s a low rate. It’s been fairly quick, I think, pretty, pretty good kind of scheme for people?

Ben Larkins
Super successful by a lot of customers we’ve spoke to and a lot of people out there I think it’s been a really, really good product that the government have done. I think it’s, well it’s far succeeded the CBILS which has gotten a lot of stick as we all know, in the in the press and things, and people, people have struggled to approve it. I think that this is a very quick, quick solution, albeit up to £50,000. So it comes to the case, if you wanted a CBILS loan for sort of £100,000, £150,000, £200,000 well up to up to a £1 million. You’ve sort of bridged your cashflow gap for probably a couple of weeks to a month. And it’s what you do after that?

Alex Curtis
Absolutely. So I think we were kind of chatting off air that you can’t once you’ve had your bounce back once you can’t top it up, and it’s Max £50,000. You can’t go twice. And I think there’s things about, even if you’ve got groups of company, you can literally only do it once, can’t you?

Ben Larkins
Well, you’ve got if you’ve got companies and if they do two separate things, then you’re eligible for two bounce backs, but you can’t get two in the same company or if your group companies do a similar thing, then they’re not eligible either. But an interesting thing though, is I read today that you can actually convert your CBILS loan into a bounce back loan, obviously If it’s under the £50,000 or under, you can convert that into the Bounceback Loan which I think a lot of people are as well, which is, which is a good thing to do.

Alex Curtis
Awesome. So what what kind of options then is if there’s some people then have took that because they’ve needed it, because it’s the CBILS has taken too long and they’ve been rejected or whatever they need this cash, do lenders still have an appetite to to lend?

Jon Maloney
Yeah, they have they have albeit on obviously, slightly stricter criteria. But, yeah, they do still have very much an appetite to lend. And also, I think they’re looking.. we’re finding that quite a lot of funders are looking quite favourably on businesses that maybe have received some support from the government by way of like a CBILS loan or a bounce back loan. That’s, that’s one of the things that’s one of the questions they’re asking a lot of applicants you know, have you have you approached, have you sought sort of government or state backed help schemes, you know? But yeah, there’s still there’s still appetite out there to lend, albeit the criteria is stricter. But there is there is appetite.

Ben Larkins
I think the the finance industry in general got a little bit of bad press recently for the banks and the way they’ve handled the CBILS scheme. But the alternative lending market is still very, very buoyant out there. They’ve really, really still got an appetite to lend, as Jon said, albeit on probably slightly tightened terms, but they very much haven’t haven’t shut the doors and they’re very much open to lending. What we found speaking to various funders and things, the money is out there, and they are they are looking to land and even some of them said, well, we’re going to take this opportunity to help businesses grow and thrive and and move forward which I think is a really, really positive spin on it.

Alex Curtis
Absolutely. That’s one thing I was gonna say pretty much every business owner I speak to now at a sort of thinking about they’ve had time to really think about their business and like, really like out the other side of this. That is they really want to grow, really want to take it more seriously than I was before. And looking to kind of invest in in growth rather than just there are companies that have done all right. They’re not racking up a load of debt, they just they literally want to invest it to grow. So that’s one thing I was going to say. Is that a good time now all sort of in the short term to be looking at that with the alternative funders?

Jon Maloney
My thought is, I certainly think you want to start looking at it if you’re serious about growth, because the thing is I don’t think we can get any lower, so to speak. But so there there is obviously going to be a boom but I think i think it could be really, really, really good for businesses that do take themselves a bit more seriously and want to expand and want to grow. And certainly now is a great time to start planning for it, I think, or you’ve got time on your hands for the next sort of few weeks. Because it looks as though June, July is when most things are going to start really, really reopening. But yeah, I do think it’s a good, good time to start planning.

Ben Larkins
Yeah, as you said, Alex, I think people have, well, they’ve they’ve had no choice but to sit there for what are we now eight weeks of lockdown. And people have really started, there’s a whole raft of things I’ve seen on social media from various entrepreneurs giving tips, advice, how to grow your business, how to how to control stress in this time, and things like that. So I think it’s really focused people’s minds. And all they’ve had to do is think about their business where they want to take it, how they want to get there and where they want to progress it to. So yeah, as Jon said, I think people will be armed with a whole raft of ideas, just how they want to take it for this 6, 12, 18 months, or two years down the line. And I think we will we will see a lot of businesses that do thrive in that period.

Alex Curtis
Absolutely. What can I be doing then if I’m thinking about planning for something, getting this cash flow forecast together, some sort of new business plan. What do you think the funder is going to be looking for to help kind of speed up the process, especially if loads of people are applying?

Jon Maloney
If you’re an already sort of established business that’s been trading a few years, got a few years sets of accounts, I think if you can put together maybe just even if it’s like a small business plans, just a one sheet, A4, you know, it doesn’t have to be anything in depth. It doesn’t have to be a PowerPoint presentation. It’s just something that you can demonstrate to the funders look, you know, you’ve really thought about this and actually, the opportunity is big. We’re positive about it. A lot of it is about positivity, you know, I mean, having that mindset, and what’s the word, conveying that that sort of positive energy across to whether it’s a funder or your employees, you know, that there is a massive opportunity out there which which I think there is and which I think is coming If you can convey that in an A4 sheet of paper, then funders will only look at it favourably without a doubt.

Alex Curtis
Okay, is there anything else that we people could be looking at any other sort of things going on in the market the minute?

Jon Maloney
It’s well, it is difficult to say because it’s, it is still very much a little bit unknown. In terms of when everything is going to reopen, you know, how, how is social distancing going to work, when everything’s back to normal? Are people going to want to go back to normal straightaway? Or, you know, is there going to be a huge party in the street or is everybody going to say ‘I’m not too scared to go out? So it’s, it is a little bit it’s a little bit unknown at the minute but I certainly think sort of four or five months down the line, you want to start doing your planning now for any growth because, as we said earlier, that there is still an appetite to lend out there. You’ve just got to get it right, in terms of the criteria.

Ben Larkins
I think also as well, there’s a, there’s a case of people, the general public, business owners have just been sitting on their hands for two months, just because we’ve had no choice. Nothing’s open and things like that. But I think when the hospitality sector for example gets open, and it gives an opportunity for everyone to socialise a little bit more, I think so it’s only it’s only a natural thing being human beings that you just want to gravitate towards people. So whether it be a couple of months of people being cautious, then I think people will want to go out, spend money, see family and socialise again. And I think that’s really when will the economy will have a good effect and people will start businesses will start seeing the opportunity for growth.

Jon Maloney
I think that’s a fair point. Actually, I think that a lot of it is that they just need to all businesses, they just need to see that little bit of evidence that the growth is obtainable generally and whereas at the moment, it’s very much sitting in your home office and dreaming, but they just need just need to be able to sort of come out of it, get get back in the office door and or get your business reopened again and hopefully see some encouraging signs that the growth or the ability to grow is definitely going to be there. You know?

Ben Larkins
I think people are sort of people have sort of forgotten in this last couple of months, not for any fault of their own, probably a bit of stress and maybe a bit of anxiety, that there is really, really good businesses out there. And when this all opens again, you’ll still have a really really good business and it is nobody’s fault that this has happened. So I think it’s just a case of when they start seeing customers through the door again, that confidence and that that belief will start flooding back.

Alex Curtis
Absolutely. Absolutely. And then if I’m so if I’ve got this sort of business plan together and I can I suppose the advantage though, for sort of coming to you guys as you can have a quick look through that and you’ve you’ve probably got an idea specifically of what the lender be looking at. And you could sort of maybe come back and challenge anything or or give a bit of advice on, on what you think the lenders might think before it actually goes across. Is that right?

Jon Maloney
Absolutely. It’s right. I think the first the first sort of port of call is the alternative finance market for this sort of thing. And you know, you don’t have to come Century Business Finance, but the alternative market is broad. I think sometimes that the cash flow companies and the alternative finance sector, they sort of get labelled under the same banner as the bank. So just because the bank have declined you, doesn’t mean anybody in the alternative finance space is going to go. That’s that’s the sort of sector that you want to be picking up the phone.

Alex Curtis
So CBILs and bounce backs is the Main Street banks. And if they’re going back to them to top it up, we’ll get more on the bank saying no, there’s a whole raft of lenders out there that will, will still look?

Ben Larkins
I mean, the thing we like about the alternative lending market is the commerciality of the underwriting. They’ll look at a business, they’ll look at perhaps a business plan, though they’ll see that there’s probably been, well, two or three months where we haven’t been able to trade but they’ll they’ll look past that they’ll look at the previous couple of years, was it profit making? Was it going in the right direction? And that that’s where they’ll look at it and go, yes, this was a profitable business or this was a good business before this started. We’ll support it going forward. And we will continue to keep supporting businesses of that type. That’s why I think the the alternative finance market will thrive in in in the in the coming months.

Jon Maloney
I think Ben’s just hit the nail on the head there. I think that ultimately, certainly in our sort of space in the alternatives finance sector, that if you were not paying any bills, and you were losing money hand over fist before COVID-19 hit, well, you know, it’s going to be very difficult to get finance. So you know, but obviously, this is nobody’s fault. Business wise, this is nobody’s fault. So it’s not like you’ve always had a bad business or you’ve suddenly overnight become a really bad business person. If you can demonstrate that the business was fine prior to COVID-19, then people are looking to support you.

Alex Curtis
Cool, nice place to end on. I think that’ll be nice to hear a lot of people who have had a really great business, but just struggling now that there is there is people that want to support them. So really good to hear.

Ben Larkins
Yeah, I think it’s probably you as a business owner, Alex, you feel it as well, me and Jon, as business owners. We’ve all probably been through those couple of weeks where we think “what what’s going to happen, what’s what’s going to go on”, but I think it’s just a case of trying to keep positive. And, as cliche as it sounds, just looking, trying to find that light at the end of the tunnel, isn’t it?

Alex Curtis
Yeah, yeah. And there’s things things happening now like housing market and things like that sort of announcements and things. It feels like we’re sort of approaching some normality.

Jon Maloney
Slowly but surely.

Alex Curtis
Yeah. Cool. All right, guys. Thanks for your time and then we will speak to you next time.

Jon Maloney
No problem.

Ben Larkins
Thanks, Alex.

Intro
This is the Century Business Finance Hub.