84pc of BBL recipients to apply for larger CBILS loans

Small- and medium-sized enterprises (SMEs) are running out of funds from the bounce back loan scheme (BBLS) and 84 per cent are likely to apply for the larger coronavirus business interruption loan scheme (CBILS) loans, new research has found.

According to new data from invoice finance specialists MarketFinance, SMEs have an average of £3,150 left in their bounce back loans, and they have estimated that this funding will only be enough to get them to the end of the week.

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Of the 5,000 SMEs which were surveyed, just 27 per cent were certain that they will survive 2020. These small business owners told MarketFinance that a cash injection of, on average, £52,800, would be required to see them through the winter trading period.

The BBLS limits its funding to £50,000 per business, but CBILS loans begin at £50,001 and can amount to as much as £5m.

“The stop-start government announcements on lockdowns haven’t helped UK businesses,” said Anil Stocker, chief executive of MarketFinance.

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“However, they continue to fight on and will, naturally, require more funds to bolster them through a tricky winter period.

“Looking ahead, ultimately, it will be the private sector which will enable the Chancellor to get the country’s finances back under control, so business leaders will be looking for some pro-growth, pro-enterprise stimulus measures in time to come.”

MarketFinance also found that two in five businesses (42 per cent) are still waiting to be paid for work which has been completed since the first lockdown.

One in five (20 per cent) reported that their payments terms from customers have been renegotiated to three months or more as a result of the coronavirus crisis.

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