Can I bounce back with a bounce back loan?

14 Oct 2020

Written by Neil Holtschke | Senior Manager

In my years at WR Partners, 2020 will certainly go down as one of the strangest. I was expecting it to be a year focussed around Brexit and I can honestly say I’d never heard of the phrase “furlough” prior to March. I also remember talking with colleagues about the seemingly absurd scenario of people being stuck on a cruise ship in a Japanese harbour but little did I realise what we were all about to experience!


The first wave of Covid-19 came with a nationwide lockdown which instantly put many businesses under severe financial pressure as activity all but ceased. The government first enabled the deferment of taxes to help businesses with their cashflow. In addition we saw the Job Retention Scheme where millions of employees would have up to 80% of their wages paid for by the state.

Then came the Coronavirus Business Interruption Loan Scheme (CBIL). A scheme designed to help businesses through the lockdown and where government provided the banks with an 80% security level. At the start of lockdown, CBIL was for many, the only option for funding to help the business survive through the period of lockdown and recovery. The process though was very long winded and in a lot of cases it required significant paperwork to support applications. Add to this the staffing challenges faced by the banks, and applications were known to take weeks to process.

Off the back of this came the Bounce Back Loan Scheme (BBLS). BBLS was a much faster, much simpler process and enabled businesses to apply for £50,000 using a very simple form. For many businesses, this was a saving grace and many business owners perhaps felt comfortable with £50,000 of cash reserves and a much reduced wage bill.

However, with a second wave of Covid-19 on the horizon, and the end of the furlough scheme now looming, the question now has to be “is £50,000 enough”?

Business owners who made use of BBL should now be giving consideration as to whether £50,000 from BBL is enough to cover the second wave and the potential downturn in revenue that this might bring.

On 24th September, the Chancellor announced that the CBIL scheme will be extended to 30 November. As it stands, this will be the last opportunity for businesses to apply for CBILS.

It is possible to convert a BBL into a CBIL and therefore given the announced closing date for the scheme, any business considering converting their BBL into a CBIL should get their applications done sooner rather than later.

We would suggest that all business owners should be aware of the following questions. These would help you in understanding whether conversion from BBL to CBIL is appropriate for you;

  • Do you know your monthly cash burn?

  • Do you know how long the cash you have will last should your revenue fall as a result of another lockdown?

  • Are you able to meet any deferred payments as they fall due?

WR Partners have a team of specialists who can help your business digitalise and produce information which allows management to make informed decisions. If you are a business owner and would like any assistance in producing management information or cashflow forecasting, we would be happy to hear from you.

Contact us here

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