Following the changes announced today to the Coronavirus Business Interruption Loan Scheme (CBILS), Mark Neath, Director in the Commercial Team at experts Old Mill says that while it is a positive step that the government has made it easier for firms to access financial support during the lockdown, they seem to be reacting to newspaper headlines rather than making proper thought out policy decisions and he wouldn’t be surprised if it changes again soon.
He said: “It’s certainly a positive step that larger businesses can now access funding, that was an obvious gap in the support on offer, but the government appears to be making announcements in a hurry and then trying to fill in the detail later which is understandable given the circumstances.
“Unsurprisingly, this leads to imperfect schemes being released, but it’s alarming that changes seem to be reactive to newspaper headlines, rather than well thought through policy decisions. I wouldn’t be surprised to see further announcements on this in the coming weeks.
“For all the criticism which they receive, banks by-and-large take a responsible approach to lending. The point which always seems to be omitted by commentators demanding easier access to borrowing is that loans need to be paid back.
“I would urge any business looking to a CBILS loan to carefully consider whether it’s the right thing for their business; take all steps possible to minimise the borrowing requirement; and model their cash flows in recovery period on a range of scenarios to assess the affordability of repayments.”