Business lender MarketFinance has warned that small- and medium-sized enterprises (SMEs) across the UK are running out of cash, as the government-backed lending schemes are due to come to a close.
The coronavirus business interruption loan scheme (CBILS) is due to end on 30 September, but research from CBILS provider MarketFinance has found that many SMEs have opted to use the bounce back loan scheme (BBLS) instead.
However, according to new research from MarketFinance, SMEs have an average of just £9,106 left in their bounce back loans, and most expect this to run out by the end of September.
The research found that 77 per cent of SMEs are aware that the CBILS can provide a larger loan facility, and 68 per cent know that they refinance their bounce back loan using the CBILS facility.
However, almost two thirds (63 per cent) did not realise that the deadline for CBILS applications is just over a week away.
“The BBLS was a good short term fix for SMEs,” said Anil Stocker (pictured), chief executive at MarketFinance.
“It provided the necessary support during the lockdown but looking ahead, the CBILS cash will provide the impetus to do more. Not having the cash flow to sustain businesses at the back end of the year could be disastrous for many of these SMEs.
“It’s essential that businesses start looking beyond simple survival and begin evaluating how they can adapt their business to these Covid-conditions. There might be new ways to change the business model and get growth going again…
“Securing government-backed funding now, before the deadline, is an opportunity for businesses to access the working capital they need to build for the longer term.
“The idea of these being “unprecedented times” has been thrown around a lot this year. Initiatives like the CBILS offer similarly unprecedented access to fee and interest-free funding – but only for a limited time.”
MarketFinance surveyed 2,000 business owners and learned that 76 per cent would be interested in having a CBILS facility ‘on ice’ in case it was needed by the end of the year.
Furthermore, 77 per cent of SMEs believe that they will only hit 50 per cent of their 2019 revenues this year, and two thirds of business owners said that a no-deal Brexit would present huge risks to their business later in the year.
More than 1.2 million SMEs have made use of the BBLS facility to date, while just over 60,000 businesses have been granted a CBILS loan.
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