Fiduciam provides £840,000 loan to children nursery – how CBILS boosts local businesses and communities.

Fiduciam, the institutionally funded short-term lender, has just completed a Coronavirus Business Interruption Loan Scheme (CBILS) loan for £840,000. The loan was to a children’s nursery in Leytonstone, in North East London, called Harvey House.

The CBILS was designed to support the continued provision of finance to smaller UK businesses (SMEs) that have been impacted by the COVID-19 pandemic. The loans are delivered through lenders accredited by the British Business Bank (BBB).

CBILS has been playing an important role in supporting local business and communities throughout the Covid-19 crisis, as the case of Harvey House demonstrates well. Navneet Bansal, who has been a child carer for many years, took the initiative to open up her own children’s nursery, addressing a shortage of childcare in Leytonstone. It was a proud moment when Harvey House opened in December 2019, but only four months later it was forced to close because of Covid-19.

This hit the owners hard as they had to make debt service payments of £113,000 per annum, which quickly became unsustainable as the nursery waited months to hear when children could return to nursery care.

Fiduciam provided a two-year CBILS loan which decreases the debt servicing cost by 64% for the next two years. This puts the nursery on a stable financial footing, also allowing it to deal with potential future Covid-19 hurdles.

The nursery qualified for the CBILS loan because it met the requirement of being a viable business before the outbreak of the pandemic and one that is expected to do very well in a more normal trading environment. The nursery employs 17 staff to provide a high-quality childcare service, which is reflected in its 9.5/10 rating on daynurseries.co.uk.

Despite such rapid success and Navneet having an excellent personal history in the childcare sector, the high street banks were unable to provide a CBILS loan as the nursery businesses did not yet have a track record for the required length of time.

For Fiduciam, as an alternative lender, this was not an obstacle. The lender got to know the owner, Navneet, and inspected the nursery in operation. Having witnessed the professionalism and passion of the staff and owner, it was clear that such a nursery was very much in need in Leytonstone and therefore offered a very strong proposition.

The Fiduciam CBILS loan now allows the nursery to establish a track record the next two years so that it can then refinance with a cheap high street bank loan.

Johan Groothaert, CEO of Fiduciam commented, “As a start-up SME, it is difficult to get finance in the best of times. Thanks to CBILS we have been able to lower the financing costs for such SMEs. Harvey House is run very professionally by experienced and passionate staff – we love to lend to such enterprises.

“It is thanks to the brave step of Navneet, setting up their own children’s nursery that Leytonstone’s shortage of high-quality children nursery places is being addressed. We are confident that Harvey House will be very successful and provide an excellent early learning experience for hundreds of children in the coming years.”

Navneet Bansal, owner of the nursery, commented, “We are very glad to have received the Fiduciam CBILS loan. Without it, finance costs would have been overbearing and we did not want to pass on the cost to the parents or cut the quality of our childcare. The Fiduciam CBILS loan puts our nursery on a very stable financial footing and ensures that all children continue to receive the discovery and learning experience they deserve. We were also impressed by the efficiency of the Fiduciam CBILS loan application process.”

The final date for applications for CBILS loans is the 30th September although where the application process has commenced, a lender may still process and offer a scheme facility up to 30 November 2020.