When Tim Holt and his business, Plastic Card Services, set about applying for the Coronavirus Business Interruption Loan Scheme (CBILS) he knew overdelivering would be the successful approach.
Like most businesses around the UK, Plastic Card Services has been hit hard by the coronavirus outbreak. As a manufacturer of recyclable and eco-degradable plastic cards, the business normally has a capacity to process 160m cards per year from its manufacturing campus in Cheshire. However, work has progressively dried up and Tim, co-founder and finance director at the company, fully expects all staff to be furloughed before long.
Cash flow is in a manageable position right now, but Tim and the rest of the executive team knew that if the lockdown situation persisted as it was predicted to this would not last indefinitely. Taking pre-emptive steps, the business set about applying for through the government’s CBILS funding support package.
First announced in March, the CBILS is providing loans of up to £5m to small and medium-sized businesses that are losing revenue or seeing cash flow disrupted as a result of the coronavirus outbreak. High street banks, challenger banks, asset-based lenders and smaller specialist local lenders are able to end in the form of loan notes, overdrafts, invoice finance or asset finance. Under the scheme, personal guarantees of any form will not be taken for facilities below £250,000. For facilities above £250,000, personal guarantees may still be required.
Making an application through their existing banking partner, Tim and his colleagues put together an information pack that included some crucial financial metrics and some plans outlining what the business planned to do on the sales and marketing front in the coming year.
Crucial to include in any CBILS application, Tim believes, are:
- Three years set of accounts
- Credits list
- Debtors list
- Balance sheet
To help other businesses, Tim has shared with us the overarching proposal and specific marketing review and plan he submitted to his bank. They provide a great introduction for any business applying through the CBILS or subsequent smaller initiative the Bounce Back Loan scheme.
“Cash low is fundamental to any business. Our concern is that, previously, you’d be able to predict the debts coming in – what people owe us. However, under the current circumstances, we didn’t know if we were actually going to get the money people owed us,” Tim explained.
Plastic Card Services probably won’t need to dip into the money it successfully secured through the CBILS until August, but thought it prudent to make an application now so that it wasn’t left in a bind when cash flow did become inevitably tighter.
Fundamentally, Tim didn’t view the application as any different to one he’d normally make with a bank in normal times. His experience led him to over do what was included, delivering above and beyond the information he knew the bank would want.
One particular request the bank had was how the business planned to reduce costs under these circumstances. Tim and the team made sure this ask and other information formed the backbone of the application and supporting documentation. This ensured that the bank’s decision maker, who knew very little about a plastic card making business, had everything he needed to make a call on the loan.
“My advice is give your bank as much info about your business as you can. Submit a good business plan going forward, explaining why it is sustainable in the future. You need to be realistic, as you’ll need to pay loan back. It’s all about preparation.”
If you’d like to hear how another business successfully applied for CBILS funding, read our interview with Playdale Playground MD Barry Leahey. He also shared the application document he sent to the bank.