If you have received a Government Bounce Back loan or Coronavirus Business Interruption Loan Scheme (CBILS) loan, schemes that were introduced to help smaller businesses impacted by Coronavirus (COVID-19), then there are important steps to follow in order to ensure you maximise your return on these finance facilities.
With the British Business Bank recently confirming that over one million businesses have received a total of almost £29.5bn in Bounce Back Loans and over 50,000 businesses have received £11lbn in CBILS loans, it is important to consider the next steps as this may be the cheapest business finance in a generation, and making the most of that is essential to ensuring businesses continue to trade and prepare for the future, whatever that may hold.
What to do next?
Government CBILS and Bounce Back Loans may be considered the cheapest money in a generation, which may make it tempting to pay off debt and other finances. However, having worked with numerous businesses in our years of experience, we would suggest that there are smarter, alternative ways to use that valuable facility, giving your business stability and potential to grow.
By maximising the returns on your finance facilities you can:
Support your cash flow
Stabilise your business
Invest long term in your business
Maximise tax position
Maximise business potential
Keep reserves for a rainy day
By using your finance facilities to invest in your business in the form of modern, state of the art equipment, using a leasing facility, asset finance or part-finance, you can maximise the potential of your business by keeping cash in the company, improving and enhancing cash flow whilst also providing the best service for your customers, clients and businesses you work with.
What should I use my CBILS or Bounce Back Loan for?
Once you have successfully secured your loan, you should look at maintaining your cash flow whilst investing in areas of your business that are going to make it more successful going forward. Regardless of the industry or sector your business operates in, if you need equipment which takes a chunk of cash from the business then finance and leasing is always a sensible option, and now more than ever with cash being its most valuable in your bank, keeping hold of reserves for a rainy day. By managing cash flow and spreading the payments of assets, you can grow your business whilst keeping the bank balance sensible and healthy.