Financial Eye help clients to secure funding in excess of £5 million from Government Covid-19 finance schemes.
When the UK went into a Covid-19 lockdown in March, the Government announced a range of measures designed to help businesses survive a period of enforced closure. These measures included a job retention scheme, deferred VAT payments, various grant schemes as well as a loan scheme designed to help small and medium-sized businesses to access loans and other types of finance.
The Covid-19 Business Interruption Scheme (CBILS) was launched 23 March. The Government guaranteed 80% of the finance to the lender and agreed to pay interest, and any fees, for 12 months. Loans were based on a limit of £5 million and for a term of up to six years.
Financial Eye, the risk management partners of Hera Indemnity, immediately set to work to contact and assist their law firm clients who required financial help.
However, much to our disappointment, in the first month of the launch of CBILS the team at Financial Eye were unable to secure any acceptable terms for clients. The Financial Institutions simply ignored the Government scheme and applied their normal lending criteria / products rather than CBILS. Interest rates of 16% plus and a requirement for fully supported Directors’ Personal Guarantees (PGs) were a long way from what the Chancellor, Rishi Sunak, envisaged. Needless to say, the take-up rate of these loans was almost zero!
The business community quite rightly were “up-in-arms” and the Financial Institutions were given repeated reminders by the Government and by the media of who it was that had bailed them out during their own financial crisis in 2008. The publicity certainly paid dividends and the banks come into line with the spirit of CBILS with dedicated online pages on their websites. Businesses were delighted and funds began to reach firms at interest rates of between 4.5% to 6.5% and, importantly, with no PG’s.
The more straightforward Bounce Back Loan Scheme (BBLS) was launched on 27 April. This helped small and medium-sized businesses to borrow between £2,000, and up to 25% of their turnover. The maximum loan available was £50,000 and the Government guaranteed 100% of the loan. There would be no fees or interest charged for the first 12 months and following this initial period interest would be fixed at 2.5%.
Currently the value of funds released for the Government’s CBILS and BBLS schemes is nearing £10 billion. To date Financial Eye have assisted many legal firms with their applications and have helped to successfully raise in excess of £5 million from a mixture of both the CBILS and BBLS schemes.
The Financial Eye team work with a considerable number of small to medium sized legal firms across the country. For our clients that want to consider help from one of the Government schemes we are naturally in a good position to help as we have detailed knowledge of their financial position – this enables us to provide the precise information required by the lenders. Additionally, good working relationships with the relationship managers of many of the banks has enabled us to expediate the funding process.
Nigel Wilson, Director Financial Eye, said “Many firms considered these facilities at the launch of the Government schemes, or even applied at the time when the banks were being far from helpful. Our strong message to firms now is that they can really access this funding; it is specifically designed to help with no interest in the first year and then extremely low interest rates subsequently. If the loan can be repaid at the end of 12 months, then it is free funding. All firms should give serious consideration to applying for this funding.”
Please do get in touch with us if you would like to discuss a finance application and how we will be able to assist you.
In the meantime – Stay safe.