Apply for a loan now to avoid cash crunch, growth specialist advises

Businesses that do not have enough reserves to pay staff and suppliers until June should apply without delay for a government-backed business interruption loan.

That’s the message from business growth specialist Inspire, which has been helping firms in Wiltshire navigate the choppy waters of running a business during the coronavirus pandemic.

“Business interruption loans are very slow to come through and staff furlough payments may not arrive in bank accounts until June,” warned Inspire CEO Rob Perks.

“For some businesses fortunate enough to have healthy cash reserves this may be okay and they can turn their attention immediately to the second point – planning for the recovery phase.

“For many others, this could present a real problem. It seems wise to plan that the furlough cash will not arrive until June – have you sufficient in reserve to pay staff and essential outgoings until then? If not, applying for a business interruption loan without delay is essential.”

There are two well-reported problems surrounding business interruption loans, said Rob: banks’ capacity to process applications quickly enough, and the underwriting criteria still being too stringent to be fit for purpose for many businesses.

To address the problems, the government has approved 20 new banks to take part in the business interruption loan while Inspire has been among the business organisations calling for the government to introduce measures to make it easier for banks to lend by either guaranteeing 100% of the loan or by using simpler forms of underwriting.

Inspire has set itself up as the ‘Alexa’ for coronavirus-hit businesses, with experts on hand to address the concerns of business owners.

Help and advice on offer includes:

Up to the minute, practical, business-specific, government bulletins by email.
Guidance on what financial support is available to businesses and how to access it.
Expert advice in risk mitigation, cash flow concerns, workforce advice, utilising technology to aid business operation and a vast breadth of other areas, and
Local connections and solutions for supply chain and logistical challenges.

Inspire can be reached on 01225 355553 or via www.inspirebiz.co.uk