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CBILS loans worth £1.22bn have Personal Guarantee attached

    • CBILS loans worth £1.22bn revealed to have Personal Guarantee attached, average loan 300% more than UK house value at £766,000:

    • -> Freedom of Information request exposes high personal risk to SME owners
    • -> Average loan value £766,000
    • SME business owners could be on the hook for over £150,000 if their business fails
    • -> 39% of SMEs not aware of Personal Guarantee risks[i]
    • -> Concerns over size of loan repayments and awareness of personal guarantee risks
Government

Clamour for small business loans likely | Catch is personal guarantee

    • A new survey of commercial finance brokers[i] supporting the UK’s small businesses suggests thousands of firms will be clamouring for business loans as the government support measures ease back:
    •  
    • -> 88% of SME finance brokers anticipate rise in demand for loans as support measures ease
    • -> 87% expect rise in business owners having to sign Personal Guarantees to get access to cash

Business growth

small business loans

Financing a start-up and reduce the risk of a personal guarantee

  • A rise in start-ups born during the pandemic[i] is hugely positive but also not surprising. We’ve had more time to think and do and explore new avenues, particularly where existing business models or employment have ceased to exist. Necessity truly is the mother of invention. But while the pandemic has created new opportunities, the lending environment for start-ups looks set to be challenging.

Start-up financing

What are the alternatives to CBILS?

  • For smaller businesses across the UK, the government has introduced a favourable lending package to help firms get access to the funds they need to survive the coronavirus crisis. The Coronavirus Business Interruption Loan Scheme (CBILS) is available via British Business Bank-accredited lenders including high-street banks and smaller specialist lenders until 30 September 2020.

Coronavirus Business Interruption Loan Scheme alternatives

29% of SMEs have kept calm and carried on with no action needed

  • Personal cost of Pandemic to business owners is high but optimism for the future prevails

  • -> 80% of SME bosses have been open and honest about state of finances with workers
  • -> 1 in 5 SME owners have put their home up for security for a business loan
  • -> 18% of SME bosses took a pay cut, 14% have not paid themselves
  • -> 78% of SME workers felt their employer has supported their mental health
  • -> 48% confident about their job prospects, 26% pessimistic
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SME survey findings

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