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Can’t get CBILS or BBLS support? Think alternative finance

The government’s various coronavirus business support schemes are up and running, but news is coming through of more and more firms failing to get much needed capital. Alternative finance can help.

There has been a stampede to access the capital being offered under the Bounce Back Loans Scheme (BBLS), the newest government coronavirus business support initiative. The scheme is targeted at small businesses and sole traders, and comes, partly at least, in response to criticisms of the Coronavirus Business Interruption Loan Scheme (CBILS).

According to reports, within 24 hours of the launch of BBLS, small businesses secured more than 69,000 loans worth more than £2 billion. The loans are 100% backed by the government and have a fixed interest rate of 2.5% attached to them. Lending through CBILS has passed the £4 billion mark, with over 25,000 loans approved since the scheme was launched on 23 March.

Support schemes paying out but problems accessing cash remain

Despite this lending, there is evidence that companies are struggling and failing to access capital through the schemes. CBILS was initially attacked for being cumbersome and ill-suited to smaller firms, and while BBLS has helped address some of these problems in terms of access and affordability, frustration remains regarding securing capital.

Notably, one of the small number of lenders attached to BBLS has come in for significant flak over the failure of its online application systems. In addition, there have been stiff criticism of the Self-Employment Income Support Scheme, with self-employed workers complaining about eligibility criteria in particular.

How small business struggling with state support can get help

The launch of BBLS suggest that the government is responding to the criticisms that have been levelled at the its coronavirus business support schemes. However, time is not a luxury many small businesses and sole traders have; they need to access cash quickly.

So, what can firms do that are struggling to or can’t access government-backed support?

Alternative finance can help.

How alternative finance is helping small businesses survive

The likes of invoice finance, asset finance, peer-to-peer lending and crowdfunding are redrawing the small business funding landscape. These facilities, which offer a more personalised approach to lending, are helping small businesses survive and grow. They are providing them with access to capital, on an affordable and flexible basis, to help manage cash flow and for critical investment.

It is notable that alternative finance is a fixture of CBILS and that, in an attempt to address criticism over accessibility, the government has expanded its pool of certified lenders attached to this scheme to include non-high street lenders that offer alternative finance facilities. Following the criticism of BBLS, it wouldn’t be a surprise to see the government follow a similar strategy with this initiative.

Whether attempting to access capital through a support scheme or having to do so outside of one, it is critical that business owners are aware of all the options available to them, including alternative finance. And whatever route is being taken, a specialist commercial finance consultant can help businesses get the support they need.

To find out more about A&T Business Associates services, contact Steve Bowles on 01903 602211 or steve.bowles@atbusinessassociates.co.uk.

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