Coronavirus Business Interruption Loan Scheme (CBILS)  


For many SME business owners, 2020 has been a year of huge uncertainty. The implications of COVID-19 on the business community has been nothing short of catastrophic.

The pandemic has seen an introduction of a range of unprecedented financial measures backed by the government, but with these initiatives due to end soon, we find ourselves asking ‘what’s next?’.

To help us better understand the position of the wider business community, we brought together a panel of leading industry experts to join our debate: SME Finance: The Next Chapter.

Here, we share the key points of insight gained from the debate:

“Let’s work together to see the economy thrive!”

The overarching reflection from the debate is that SME businesses, intermediaries and finance providers will all need to take a collaborative approach and work together to support each other.

Paul Handford, Communications Director at Resonance Ltd, observed that community “place-based investment” has risen during the pandemic. It is clear that, in order to boost economic recovery, communities will also need a collaborative approach and will need to work together and “invest in themselves” by supporting local businesses.

As Paul O’Collins, Head of Innovation at Business West, remarked “It takes an ecosystem to raise a business”, but as many of these ecosystems are beginning to “unravel” as a direct result of COVID-19, the wider community must play a part in helping SME businesses to survive.

“Look further into the future, don’t just fix today’s problems”

SMEs were offered a liquidity lifeline with the government backed CBILS & BBLs initiatives. However, Jon Field, Commercial Banking Director at Metro Bank was quick to point out that these schemes are only a short-term fix.

A longer-term strategy will be required for businesses to successfully navigate the coming months, or perhaps even years.

John Peters, Managing Director for SWIG Finance followed this theme by commenting that, for many businesses, the debt taken on during COVID-19 may be unsustainable, particularly for those businesses who face further or ongoing disruption. Going forwards, it will be important that there are “mechanisms in place to support longer term survival prospects”.

“Lenders and business support organisations need to create products that support diversity”

The effects of COVID-19 have been devastating for the gig economy, and more so for the migrant community where there are a high proportion of gig-workers, Lydia Samuel, Entrepreneurial Lead at ACH said.

Lydia questioned whether the finance sector was inclusive. Many of the products and services on the market do not cater for minority communities, whose cultural beliefs surrounding debt could be a major barrier to accessing finance, meaning that a whole community may not have the support required to navigate the current business climate.

To ensure that we are providing inclusive services and products, businesses need to champion diversity in all areas of the business. Finance providers needed to consider how inclusive their current products and services are, and if they were accessible to all sections of the BAME community. Can more integrated services be developed that encompass the support these businesses require? For example, a package which includes financial support, insurance and training would be much more appealing prospect.

“We need insight first and foremost”

Paul O’Collins commented that “money does not always come with understanding”.  This links back to John Peters’ comment on sustainable lending. Where money is concerned, are we doing enough to educate the business community on the implications of debt?

Jon Field of Metro Bank was advised that, as with many other financial organizations, Metro Bank are working very closely with their customers to provide relief where they can.

In broader context, another key takeaway from the debate was centered around the lack of coherent information available to businesses facing disruption. Lydia Samuel said, “There is a desperate need for help but a low awareness of support available, and particularly low awareness of who the support is aimed at”.

“Entrepreneurship is on the rise”

Paul Jones, Senior Manager for the UK Network Team at British Business Bank mentioned that over the course of the pandemic, the take-up for the government back Start Up Loans has doubled in size.

John Peters of SWIG reinforced this statement explaining that SWIG Finance, the South West’s delivery partner for the government’s Start Up Loans scheme, was experiencing an exponential demand for Start Up Loans as the economy rapidly restructured itself. He also made the case for CDFIs to be given access to long term capital and a continuing guarantee mechanism to ensure ongoing lending to smaller and early stage businesses which had restricted access to mainstream finance.

“SMEs are the lifeblood of the UK, and the South West”

From this discussion, it is evident that long-term, pragmatic thinking will be critical for SMEs.

Businesses will need to create long-term strategies for survival. With further disruptions on the horizon, small to medium sized businesses will be forced to continue pivoting their business to ensure continued existence.

Those who cannot adapt may find that they cannot move forwards.

Wider communities will play an important role in SME business survival by working together to champion their local businesses.

The overall conclusion from this debate is that collaboration will be key. We need to work together to weather the pandemic and come out as a stronger, more resilient, more inclusive business community.

Do you Need Business Finance? Check out this blog from our Business Manager Jordan Berg;

View the debate via the video below;