Watch the webinar
- Matthew Fell, Chief UK Policy Director, CBI
- Flora Hamilton, Director, Financial Services, CBI
- Stephen Pegge, Managing Director, UK Finance
- Alex Beardsley, Joint Managing Director, ABL Business
- James Harding, Co-founder and Partner, Tortoise Media (Chair)
In this session, we covered:
- A year on: Reflection that the original COVID loan schemes were developed very quickly and at speed and that we’re about to get into repayment period soon for some of these schemes.
- Recognition too that lots of first time borrowers involved in these schemes.
- Two key challenges – have to help businesses with repayment strategies for this debt, and finance them back onto feet again and into positions of growth.
- Business in lots of different stages on this: some businesses have had no revenue for 12 months, others have had to re-open close numerous times over the past year. Real polarisation between what finance businesses have taken and how much they still have left.
- On the Pay as you Grow Scheme:
- Applies to Bounce Back Loans only
- No repayments at all for first 12 months, so increases flexibility and businesses can take on more loans and extend terms, or only pay interest.
- Enables firms to free up cash-flow to keep going, restock, adjust business to help with re-opening.
- Repayment will be spread out over a few years – won’t count as forbearance.
- Lenders will contact businesses to give people more information on these options.
- On Recovery Loan Scheme:
- This is a new scheme designed to ensure businesses of any size can continue to access loans and other kinds of finance up to £10 million per business once the existing COVID-19 loan schemes close.
- Can be taken out in addition to existing Government loan schemes.
- More like commercial term loan facility – but specific terms depend on the lender.
- Businesses should look at the diverse options of finance available including equity finance or invoice and trade finance. Will be more of a mixed economy going forwards – a positive development.
- Members are encouraged to get in touch with any case studies to help inform our conversations with government on cashflow and finance.