Tips on securing finance
The following guidance on seeking loan funding has been produced by the South West Business Council, in accordance with recommendations from the British Business Bank.
Issues to consider before approaching your bank for funding:
- What is the purpose of the requested facility (short term cash flow/longer term cash injection) and how will the funds be specifically used to address the shortfall caused due to COVID-19?
- Detail on the amount of the borrowing request and how this amount has been derived. How much are you requesting and why? A short term cashflow projection would ideally be presented.
- Did your business make a profit last year?
- On what basis has the amount been calculated? Has this been based on existing (pre COVID-19) income and expenditure levels or future levels? If future, what assumptions are being used?
- What are the costs you currently have to pay in regard to running the business? e.g. staffing costs, business premises costs, stock and or/other debt costs and what are you doing to reduce these? Provide a list of any other loan and finance commitments currently outstanding, including monthly amounts being made for each of these commitments. Have you asked for repayment holidays on these commitments?
- You will be responsible for repaying 100% of the loan, so comment on the affordability of this new facility in addition to your existing borrowing commitments.
- When the pandemic is over, how long do you think it will take your business to recover? What challenges do you expect to see e.g. future loss of contracts/staff availability?
- Provide key figures. What was your Annual Sales Turnover for 2019? What was your Annual Wage Bill for 2019? Current number of Employees?
- What have you been able to access in terms of Government schemes in response to COVID-19? Find financial support for your business from Government.