A Warwickshire-based accountant is calling on Chancellor Rishi Sunak to consider a further overhaul of the CBILS scheme.
Sean Farnell is a partner at Burgis & Bullock which has offices in Leamington Spa, Nuneaton, Rugby and Stratford-upon Avon.
He is making the call as a member of The Corporate Finance Network, which is also calling for the Government to supplement this with other grants to support the working capital needs of the country’s SMEs following the Chancellor’s announcement that the furlough scheme is to be gradually withdrawn.
He said: “As part of our membership of The Corporate Finance Network across the UK, we had been asked to contribute to an exercise with eighteen other firms, where we identified how many of our clients had prepared cashflow projections.
“The research, representing over 19,000 owner managed business clients who employ on average 20-80 staff each, shows that only 10 per cent have prepared detailed cashflow projections, and they are likely to suffer a great shock when they return to work, as almost 70 per cent have reported a reduction in trade as a result of Covid-19.
“Companies will not simply be able to pick up business where they left off. They have debts from deferred taxes, rents and overheads and they will now incur more expense as they are required to make their workplaces Covid-19 secure.
“In addition, trade will not return to 100 per cent of pre-Covid levels immediately as social distancing will still require all sectors to take things slowly. This will ripple down the supply chain and as many SMEs have already extended their credit with suppliers past their agreed terms, they will struggle to order more materials and meet any demand from customers which they may have.
“I would urge all business owners to prepare line by line cashflow projections and to engage with efficient credit control procedures in earnest.”
Burgis & Bullock was one of 19 accountancy firms to assist with the survey, which reached a total of 19,710 SME business clients across the country.
The survey found only 10.3 per cent of these clients have prepared cashflows, with 69 per cent suffering a reduction in trade.
Sean added: “CBILS is still not working for most SMEs and facilities are not being approved quickly enough.
“Our clients on the whole do not meet the criteria for the small business rates and retail grants and therefore I would urge the Chancellor to consider rolling out further grants for working capital support, or consider how else the British Business Bank can urge banks to lend more under the CBILS scheme.”
The Corporate Finance Network consists of some of the most proactive and commercially astute regional, independent accountancy firms in the UK. They specialise in providing corporate finance advice for smaller transactions.
To find out more about Burgis & Bullock and how the firm can help your business plan for the future, visit www.burgisbullock.com