The year that was in commercial finance
Darren Willoughby of brokers 2XL Commercial Finance relives the last 16 months illustrating the UK’s journey through Covid-19
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t’s 11.30pm on March 24, 2020 and I’ve just put the phone down on my 87th call of the day. The world is in the depths of a pandemic and the economy is showing signs of crumbling. Frantic business owners are scrambling around to see what support is available, while many stare into the abyss as the Prime Minister enforces lockdown. You remember it well, I imagine. BBL and CBILS loans are launched in an attempt to keep an already fragile economy afloat in the backdrop of Brexit, and as commercial finance brokers at 2XL, we are often first port of call for clients and professionals. Information is scatty at first, but then comes the availability of £50k in the form of a BBL without credit checks and no personal guarantee, which sends business owners into a frenzy and bank managers to throw the rule book of lending out the window. It causes one commentator to state: “we may as well put a skip at the end of the road with bags of £50k in and clients just sign to say they will pay it back.”
CBILS Loans are available for in excess of £50k but only to those who can prove they can pay back based on previous years’ performance, which leaves a big gap for those who can’t or haven’t traded long enough. Then comes the inevitable lull as businesses in the main put off major business decisions until the turbulence passes. This allows some business owners breathing space, although for those with children, that is replaced by schoolwork as schools are closed and the economy grinds to a halt. When it’s thought green shoots of hope are around the corner, the death toll continues to rise with government borrowing reaching stratospheric proportions and consecutive lockdowns halting any enthusiasm of a recovery whilst we continue to clap the NHS for their sterling efforts against a backdrop of turmoil. ‘Resilience’ and ‘diversification’ are the cries as many businesses adapt, and in some cases, thrive. ‘Out of adversity comes triumph,’ as
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some say while businesses adapt to the ‘new norm’ and, thankfully, at the time of writing, the vaccine seems to have come to our aid. So what next? The recovery loan scheme has been launched to help UK businesses access finance as they recover and grow. It aims to help affected companies and can be used for business purposes such as managing cashflow, investment, and growth. Take up of the scheme has been slow, which could be a good sign as it may mean businesses are finding their feet again, or the alternative view is that we haven’t quite reached the bite point yet as most businesses haven’t yet started paying off Covid support and may be reticent to take on more debt. Let’s hope the vaccine enables us all to get back to what we all do best… which incidentally in my case isn’t a six-year-old’s science homework! Darren Willoughby is Managing Director of 2XL Commercial Finance, a Commercial finance brokerage specialising in all things business and property finance.
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