COVID-19: 'Cash is Reality', don't underestimate the CBILS Loan opportunity

French Duncan | 14 April 2020


The CBILS is now closed to new applications.

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Update on the Bounce Back Loan Scheme:

“In my view the terms of the Bounce Back Loan Scheme make it a sensible choice for any business impacted. At no cost for the first year it can provide a safety net, delivering peace of mind that your business has funds to fall back on if required – the big unknown is timescale and this loan helps mitigate the impact.  At a fixed 2.5% interest rate after year one, it could also help businesses to make longer-term plans – plus it has a simple application process and speedy turn-around-time. I would advise every business to strongly consider this option.”


Cash is Reality.

There is an old adage that accountants often trot out to new business start ups.

Turnover is vanity

Profit is sanity

Cash is reality

In the current environment this adage takes on a whole new level of importance as the business community tries to make sense of the economic conditions and wrestles with the conundrum of how do we get out of this in one piece. We are in a situation for which experience alone can’t provide the answer as no-one has experienced anything like this in their business life so far.

This landscape has therefore led the governments of the world to turn to the base solution for all businesses which has been apparent since trade commenced. i.e. Cash.

The initiatives the government have put in place all relate back to keeping cash within businesses whether it be through deferment of tax liabilities or job retention payments to businesses.

However there still seems to be a reluctance from many business owners to utilise the CBILS initiative whereby businesses can borrow from the banks on a basis significantly guaranteed by the government. This scheme continues to evolve as the necessity of the delivery starts to supersede the banks’ commercial processes, many of which were a product of the post banking collapse of the last decade.

Now that some sense seems to be in play, the question arises. Why wouldn’t you?

Despite the initial difficulties encountered by the banks, in reacting to the Chancellors short term objective of providing liquidity to businesses, while operating within a highly process driven commercial lending system. We are now at a place where there is a process in place, applications are being made and funding agreements are starting to emerge. The banks appear to be playing their part. However there still seems to be a reluctance with many business owners to make an application.

This reaction is understandable given the experience of the last decade in trying to work with an evolving banking system to adequately finance the growth of a business. It hasn’t been easy!

However I think at this particular stage of events it is important for business owners to go back to basics and think about cash and use the entrepreneurial thought process which served them well in the early days of their business to chart a plan to see them through this crisis.

Or more importantly make decisions now which put the business in a stronger position when the economy emerges from this crisis.

So if a business owner breaks down the problem into its components, we have:

  • Uncertainty as to the length of the lockdown in the country/ across other countries
  • Uncertainty as to state of the economy when we emerge from lockdown
  • Uncertainty as to the robustness of not only our business but that of our customers
  • Uncertainty as to when normal trading terms will return
  • Also can we maintain staff levels through this level of uncertainty

The question to be asked is:

How much cash do you need to have in the bank to see you through this?

My main concern for my clients is that the timescale to normality, not just the end of lockdown has a direct correlation to cash-flow and I feel at this moment in time I wouldn’t want to gamble on that.

Therefore I see real merit in using the opportunity to obtain access to funding which will provide some peace of mind against the uncertainty.

Given the relatively favourable terms and conditions, outlined by the Government, which apply to CBILS loans and the willingness of the banks to engage in the process I see it as an opportunity from both sides.

The banks have the opportunity to re-engage fully with the business community and be seen to be pro-active in assisting businesses through difficult times.

Business owners have the opportunity to offset some of the uncertainty, provide their business with a strong base to emerge from this crisis and also the flexibility to make good entrepreneurial decisions on the direction to take their business in the future.

So although it is a truism at all stages of business growth, it is front and centre at the moment.

Cash is Reality!


For more information about the Coronavirus Business Interruption Loan Scheme (“CBILS”), such as criteria and how to apply, click here to visit our separate blog post.

For wider Cash Flow management tips specific to VAT, click here to read another of our blogs.


Contact details:

At French Duncan we have a lot of experience in grant funding and loan agreements, so will be able to help you through our dedicated teams covering Corporate Advisory, Business Restructuring, Corporate Taxation & HR Services.

Whilst some of our staff are currently working from home, all of the above can be contacted on their email addresses or on 0141 221 2984.


Other COVID-19 Information:

For all our help, support and information around COVID-19 / Coronavirus visit, where you can link to articles deferring HMRC payments, tax and business rates, debt assistance & restructuring and much more.




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