Cowgills client Q&A summary – 30 April

On the 23 April we held a Q&A session for clients on the Coronavirus Business Interruption Loan Scheme. Guests were able to hear from our experts, Rob Lord, Partner, Sam Davies, Corporate Finance Partner and Ben Day, Head of Business Funding.

Below you will find a summary of some of the key topics from the discussion. We will be holding future events for clients and contacts, do drop us a line if you would be interested in attending enquiries@cowgills.co.uk

Summary of today’s call

• A lot of lenders coming into the market, the landscape is constantly changing.
• We are receiving around 2-3 calls a day about people who have been rejected by the banks and are not sure why.
• If you are struggling with your bank there are 2nd tier lenders who will look at this for you, which has given us a lot of hope for getting this capital out of the door.
• On Wednesday there was an announcement that seven lenders can now do a self-approval, review the historical activity you had with them and make a decision. This is helpful if you are a good and straightforward client, if not it’s given the banks a way out.
• We would always say have a conversation with us about your application first and we can guide you as to whether you need some further assistance with your application.
• We have worked on many projects where we have modelled the cash in those companies which has resulted in them not requiring a loan.
• When we put an application in, we are receiving a decision within three days and its then 14 days from the approval to money being drawn down and in the bank.
• NatWest remain the most active.

Case Studies

Two very different case studies:

1) Healthcare business making £7m very profitable £3.5 m on the balance sheet.

Raised money to exercise an option agreement to buy back shares

On the other end of the spectrum:

2) Construction business – loss making, all money received was for pure working capital,

• Both instances are opposite end of the spectrum the cash rich business was not actually what CIBILS was for, but it means it can continue successfully. The Construction business – business had fallen off a cliff, did get declined first, but then built a 2-year forecast which demonstrated it was a viable lend.
• Both are great examples of how talking to the bank and pressure from Cowgills has enabled us to get great results.
• We’ve now got a great structure in place for successful applications, which we are happy to share. We don’t have to do the work for you. We want to be here to support businesses.

What are the banks finding attractive with an application?

1. Coronavirus strategic plan
2. 13-week cash flow model
3. What are you doing to manage your creditors (short and long term)
4. How are you going to have your creditors on side later?
5. 2-year integrated model, fully flexible which we can run four different scenarios. Stretch working capital, flex rate of growth, demonstrate all of the scenarios that are likely to occur so the bank doesn’t have to ask the quest
6. Pull all together in a 7-8-page document go through all of the criteria set out around viability, overview why it’s a good business.

• Building forecasts is quite a specific skill. Outsourcing some of the risk to someone else is a comfort.
• This is essentially free money for a year. Not often you get no interest costs and no arrangement fees to raise this capital.
• Even if you have cash on your balance sheet it is a good idea to raise this funding.
• For businesses, bit more scale and maturity, PG’s aren’t being asked for.
• Bounce Back Loans – there is nothing to say you can’t have one or more of a different type of loan. It’s a case by case basis.
• Every single client that we’ve had an issue with, has gone to the bank with an application that doesn’t have enough detail If you go in with high quality and the full picture.