12/11 Why Should You Include Financial Scenarios With Your Business Loan Application?

You will be aware that the application deadline for three Government-backed loan schemes has been extended until 31 January 2021. Applications have been extended for the Bounce Back Loan Scheme and the Coronavirus Business and Large Business Interruption Loan Schemes.

Banks are seeing businesses who have previously accessed CBILS and Bounce Back funding now returning for more support. Businesses now also have the option to potentially extend the existing CBILS loan terms from 5 to 10 years and access further funding. Many other businesses are now requesting financial support for the first time.

Robust and transparent financial modelling which clearly articulates the risks and opportunities that lay ahead is now critical for the success of an application. The Banks need to be confident that the funding they are releasing will be secured by the British Business Bank. Your planning should include:

  • Supply chain disruption scenarios – both operational and financial. (What if a major customer asks to extend their credit terms as they have cashflow issues? What if a supplier increases their prices as another major competitor in their market has a manufacturing breakdown so demand exceeds supply?)
  • Projected market demand changes and the subsequent effects on your business cashflow. (Could your business survive another 4-6 week Government sanctioned lockdown?)
  • Adjusting to post-Brexit legislation. (Will your EU customers look to source their products elsewhere within the EU, do you need additional staff to facilitate the additional workload?)
  • Cyber security threats, particularly if an increased amount of your business is conducted remotely. (How robust is your website and network security?)
  • Skills shortages (What is the impact of your factory shutting down if a staff member tests positive and half your workforce has to isolate? Have you had to make skilled staff redundant? Are your finance team furloughed?)

Our Queensgate consultants have the expertise to help you react quickly and can assist your business or clients in pulling this vital information together and submitting to the Bank. We can also liaise with the Bank to answer their queries and demonstrate to your lender that your forecasts are a result of careful calculation and are based on valid assumptions.

If you would like professional help with scenario planning and a loan application for your business, get in touch. We will talk to you in confidence either over Microsoft Teams or in your Covid-secure workplace.

Contact Queensgate Management today for free business support in confidence

We offer a 1-hour FREE consultation for businesses, conducted in confidence either over Microsoft Teams or in your Covid-secure workplace, to give business leaders an opportunity to share their concerns and find solutions. To arrange a 1-hour free session with one of our experts, submit your details through the form below and start planning your business future with confidence.

NB Some elements of the Winter Economy Plan are devolved and therefore support may differ in Scotland, Northern Ireland and Wales. Do not hesitate to contact us the the latest guidance and update. Please note that our consultation sessions are limited to one per business.

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