The UKs British Business Bank has confirmed that applications for the Coronavirus Business Interruption Loan Scheme (CBILS) will close on 30 September 2020, with a cut off completion date of 20 October.
Furthermore, the Government is set to make an announcement on the future of the loan schemes it is currently backing in the coming weeks.
According to financial services company MotoNovo Finance, the CBILS asset finance facility has been used for a variety of investments by automotive dealers including IT, office equipment, HGV’s for vehicle home-delivery to customers. The company stated that now is the time to review how a CBILS asset finance facility could help to accelerate positive change in the car retailing environment.
Luke Curtis (pictured), head of MotoNovo Commercial Finance, an accredited introducer for CBILS, explained: “The CBILS asset finance options we are making available to dealers are available to a large number of dealers and while we have seen a welcome bounce-back in vehicle sales, there are likely to be challenges ahead. At the same time, the need to invest in adapting the established business model to embrace an increasingly digital car buyer has never been so apparent.
"CBILS is designed to help businesses that have lost revenue and seen their business disrupted as a result of COVID-19, and crucially helping them to survive and thrive as the new normal operating models evolve. Now is the time for dealers to consider how the type of £50,000 - £250,000 CBILS loan we can offer to benefit their businesses.”
Dr. Kerstin Braun, president of global trade finance provider Stenn Group, said: "The UK is already in the deepest recession since records began. The economy was essentially flatlining before the pandemic and so it has exacerbated the financial toll. After four months of harsh controls, growing numbers of companies are now under severe financial stress, with job losses and pay cuts becoming the new norm, especially as furlough gets nearer to the end.
“This is particularly the case in the retail sector. Retail employment in the UK shrunk in August at the fastest rate in more than a decade, as retail giants struggling to attract in-store customers have been forced to close hundreds of bricks and mortar shops. This is exactly the case with John Lewis, Marks and Spencer and Debenhams.
“Insolvencies will continue as we transition to a post-COVID economy. On the losing end will be firms weakened by high debt burdens and those that are unable to adapt their business models to a post-COVID world."
Supply chain upgrades and business model shake-up
Alongside the news of the CBILS scheme coming to a close, new research from One World Express has found that 57% of decision-makers say the pandemic provided the incentive needed to make positive changes to their business model.
The survey of more than 502 decision-makers within UK businesses revealed that 36% had witnessed other businesses in their supply chain closing down since March, forcing them to source new partners. As a result of these closures, 41% of respondents have been forced to re-evaluate supply chains and have successfully found new, better partners, with 35% now using cheaper suppliers than those which they had previously relied on.
Atul Bhakta, chief executive officer of One World Express, said: “The coronavirus pandemic has been both damaging and challenging for the UK’s private sector, but that is not to say it has not also presented opportunities too. This research highlights how COVID-19 has forced businesses to re-evaluate their business models and supply chains, in turn enabling them to make improvements to the way they operate.”
These improvements to operations, processes, technology and supply chains have, in part, been made possible as a result of government intervention in the form of support schemes such as CBILS, BBILS, cash grants and tax relief.
Furthermore, despite some 56% of businesses being forced to change the way they deliver products and services due to the pandemic, 52% of businesses stated they were confident that turnover would increase in the second half of 2020.
Carried out in July 2020 via an online survey by an independent market research agency. All 502 respondents were senior decision-makers (managers, C-level employees, owners and founders) within UK organisations.
Bhakta added: “Most importantly, there is a palpable sense of optimism coming from business leaders – the majority are confident that their company will experience a positive second half of the year, which comes in stark contrast to the doom and gloom of just three months ago. What matters now is that businesses do not become complacent but continue to seek new opportunities amidst the challenges of the pandemic; they must strive to pivot, adapt and grow.”
Founded in 1998, One Express is a global logistics, e-commerce and IT solutions provider. The London-based company provides fulfilment, warehousing and final-mile delivery solutions for companies of all sizes around the world.