Last week Barry Leahey successfully applied for funding through the Coronavirus Business Interruption Loan Scheme (CBILS). He talked us through the steps he’s taken as MD of Playdale Playgrounds since lockdown and the approach followed to make sure his loan application was reviewed with minimal pushback or delay.
The same approach won’t guarantee you a successful loan application, but it could speed up the process and help you give your application every chance.
- Barry shares his coronavirus experience so far
- Explains why it’s not too late for disaster recovery
- Advises on how to prepare a strong CBILS application
- Shares his thoughts on what to do while you’re waiting to rebuild
A little bit about Playdale
Playdale Playgrounds is a family-run business that manufactures outdoor play equipment. Based in Cumbria, with 110 employees, it has created over 23,000 play areas in 59 countries. The current limited company was born in 1978 but the family business dates back to 1735, having passed through nine generations.
What’s happening with the business now?
Playdale’s construction teams are usually working in 25 play areas at any one time. That number has now been reduced to three. Barry said even those are compromised because of on-site logistical issues like where staff can stay, where they can eat and so on. “The impact is huge. But we’re classed as a construction firm, so are open for business,” he added.
Keeping the engine ticking over
Despite being open for business, projects in the pipeline have stalled, leading them to take advantage of the government’s Coronavirus Job Retention Scheme (which Be the Business has produced an extensive FAQ on). “We furloughed 94 out of 105 staff last week. There are now 11 of us working from home, running the whole business, with people doing jobs they’ve not done for years. We tried to stick to people’s skillsets where we could but it’s not always possible. We’re idling our engine.”
Ready for a crisis, but not one like this
Several years ago, Playdale’s insurance company encouraged them to develop disaster recovery plans which have paid dividends. “We had a solid disaster response plan in place, which has served us well,” said Barry. “It was particularly good for helping us focus on employee health and safety first. Everything was set up for working off site – we had risk assessments and line manager support ready to go. Everything was backed up and all the tech and data was in place.”
Dealing with an economic change process
That planning involved some dummy disaster runs based on things like fire and flood, but no one expected a global pandemic. Barry has truly taken in the scale of the crisis:“COVID-19 is triggering an economic change process. Disaster recovery now is basically about ending one way of running our businesses and starting another.” For that reason, he believes it’s not too late to do a disaster recovery plan. “Do one now. Things are still unfolding. Look at your numbers, look at your cash flow, take positive action and you can mitigate the worst of it.”
Live and breathe your cash flow
How hard businesses are being hit by lockdown depends to a large extent on cash availability. To apply successfully through the Coronavirus Business Interruption Loan Scheme, you’ll need all your financials and a cash flow forecast ready. Start by getting your management accounts (to March 2020) and your credit rating up to date. “Look at your numbers every day, every minute” urged Barry. “First, lock in any cash you can: terminate contractors (within the law of course), stop back-to-back orders and deliveries.” Playdale Playgrounds is keeping a rolling cash flow forecast for best and worst case (zero per cent sales for three months and 30 per cent sales for 9 months. “We’re reviewing it all the time. This is what will help us plan our recovery, decide which teams to bring back in first, sales or manufacturing.”
Moving out of emergency mode
While all businesses are dealing with the consequences of lockdown, some are moving at a faster pace. Some are busy seeking alternative revenue streams and some are considering options for finance. Playdale has already completed its emergency phase. “We’d just had our 2019 accounts audited and had remote working contingency in place. That helped us move fast. We’ve protected the jobs, locked in the cash, sweated the numbers, secured the finance. Now we’re using the time to work out our long game, look at our pipeline and work out how to restart the engine when the time’s right.”
Lockdown to-do list for business leaders
Coronavirus presents so many unknowns that businesses are playing the waiting game. But it’s far from a period of inactivity. According to Barry, it’s quite the opposite. “It’s important not to bury your head in the sand, switch off the light and ride it out from beneath the covers. We’ve got to stay awake, watch the numbers.” Barry talked about four areas of focus for him and his team as they maintain this holding position.
- Communicate with your staff: “Giving people reassurance is vital. If you don’t feel positive and strong, pretend. Of course you’re going to worry, but worry with a smile on your face. When push comes to shove, leadership is about communication. It’s your time to step up, be visible, lead your team through and out of this crisis. If you find yourself in a dark place, use your peer network – you are not alone, there are people to ask. See if there’s a counselling service included in your insurance or health plan. Use it.”
- Health check your supply chain: “Call your suppliers, ask how they’re doing, keep dialogue open. But essentially what you’re doing is risk-assessing them. You don’t know who’s going to go under but you have to take a view because it will impact you. Brexit nudged us into stress-testing our supply chain last year, so we already have a backup list of suppliers. You need to be ready to move when the time is right this summer and you don’t want supplier gaps to be a stumbling block.”
- Balance your marketing: “We’ve deliberately gone low key with COVID-19 related customer communications on our website. We’ve only added clear, factual information about our response to the crisis and any changes we’ve made to the way we’re working. We’re keeping some of our social media marketing activity going. Essentially, we want to show that we’re open for business. We’re still getting enquiries in. Come the summer we want to make sure we’ve got a pipeline for the sales team to work with.”
- Consider your plan of attack: “Part of our rebuild strategy is to reprice all our projects. Our cash flow forecasts are based on this too. When we come out of this in two months’ time, we need to be more competitive than ever. We need to be able to close all the big deals that are currently on hold and we need to encourage market activity.”
Help with applying for Coronavirus Business Interruption Loan Scheme
Coronavirus Business Interruption Loan Scheme applications are starting to go through for SMEs, despite early bottlenecks. At the time of writing more than £290m worth of funds have been approved. Whether you’re still completing your application or gathering the information required by your lender, a template might help you move your application forward this week.
As a show of support to fellow SMEs looking to take positive action, Barry has shared with us the accompanying statement he submitted to his lender along with the business’ financials. He suggested: “All you need is to take that first step. Use a template like this one to get you going. Where we’ve blanked out our confidential numbers, just insert your own.”
Your first step: find an accredited lender
The Coronavirus Business Interruption Loan Scheme is available only through accredited lenders. Please ensure that you, your accountant or any other intermediary helping you only apply through an accredited lender or partner. The number and type of lenders is likely to be widened soon, so keep an eye on the list. Most lenders are encouraging applications via websites rather than the phone. Barry put it like this: “Get your paperwork together, grab a brew, and start the application as soon as possible.”
What if you’ve been turned down?
If one lender turns you down, you can still approach other lenders within the Coronavirus Business Interruption Loan Scheme. Another thing to bear in mind is that access has recently been opened up to more businesses who previously would not have been eligible. So it might be worth re-contacting a lender if you were unsuccessful first time.
For more information
The British Business Bank manages the loan scheme on behalf of, and with the financial backing of, the Secretary of State for Business, Energy and Industrial Strategy. Here are some useful pages: