Since the beginning of the coronavirus outbreak in the UK, British companies have borrowed £38.4bn under the government’s three emergency credit programmes.
One such programme is the Coronavirus Business Interruption Loan Scheme.
Watch the whole panel debate, where we spoke to chartered accountant Yasser Khan, restaurateur Graeme Fulton, and chef patrons Nick Gayler, Kate Ahrens, Paul Foster and Simon Hulstone.
Firstly, what is a business interruption loan?
As explained by accountant and partner at GrowFactor, Yasser Khan, the business interruption loan was designed to help small and medium businesses who have been negatively affected by Covid-19.
With applications capped at £5 million, it is 80% backed by government, who will cover fees and interest for 12 months and doesn't entail any personal guarantees. In the words of chef owner of Salt, Paul Foster, "if your business fails, you don't lose your house."
The 10 page application is relatively straightforward, and, as of today, there are more than 50 lenders under the scheme.
You should seek a business interruption loan if either of the following apply to you:
1) You'd like to plug any cashflow holes - like supplier bills, electricity bills etc - resulting from your restaurant being closed during lockdown
The advice given to Nick Gayler, which he thought wise to pass on, was the following: "Take it. If you need it, use it, if you don't, don't."
2) You want to invest in and grow your business
How should you go about applying for a business interruption loan?
1) Build a robust plan
2) See what you can do to lean out your business for the next few months
3) Ask yourself - how long can you get by without a loan, and consequently, how much do you need?
Yasser said: "If we can predict when businesss can get back to some kind of normality, how long do you think you can last without a loan, and how much do you think you'll need.
However, be aware, as Paul Foster explained, that after 12 months, repayments will rise quite highly.
He said: "Hopefully we'll be giving some back ahead of then, but before then, it's peace of mind because I don't know where we're at."
What if your application is turned down?
1) Try, try again
Yasser stressed that even though banks have bigger guarantees - as the loans are 80% backed by government - they are more reluctant to give them out as there are no personal liabilities on the borrower's part and because of the sheer volume of applications being processed.
If you applied for a loan but were turned down, you may be able to apply again.
You may, however, want to apply with a different lender. Follow this link for the full list of government-accredited lenders and partners.
2) Seek help from a financial advisor
As tragic as it may be, applications by single businesses through organic channels are considerably less likely to be approved. Applying with the help of a broker puts your application in different sets of hands, and simply increases the chances of it being seen as credible.
Yasser explained: "The reason why people are being rejected is because the applications aren't being put in front of the right people who can make those decisions.
"Unfortunately, what we've seen is that the application and the people you speak to matters a great deal in terms of the route which the application takes.
"So if it goes via a funding intermediary or a broker, the bank managers who have a relationship with those brokers are much more likely to look at that application rather than it just coming from the front end.
"We've seen that where - banks that have denied CBILS to their to some of our clients, we've taken the application, tweaked it a little and then taken it to the right people, and managed to turn the decision around.
"It is a case of getting it through the right channels, it is a case of putting forward the best case in terms of the business
