Short-term funding amid Covid-19: alternatives for government support

By DTE Business Advisers

15 Apr 2020

money-2696238_1280.jpg

The UK government has introduced a number of measures for businesses and individuals over the last few weeks in a bid to provide options for those struggling with the commercial and cash impacts of COVID-19. However, not all businesses may qualify for these support measures, and/or not all of these measures may suit the needs of individual businesses.

In this article, we look at various additional options that businesses can look into for their funding needs:

Government support measures

Some of the most notable schemes announced by the Government so far include:

Coronavirus Business Interruption Loan Scheme (CBILS). Offered through British Business Bank partners Coronavirus Job Retention Scheme 3 month extension to filing of annual accounts Deferment of VAT and self assessment payments

(For a comprehensive list of all government support schemes, see our summary of government support for businesses affected by Covid-19 here).

Whilst these initiatives go a long way to alleviating some of the pressures faced by SMEs, they do not provide a total solution to all of those that they are designed to help. There remains a very real and pressing challenge for those seeking to participate in these schemes and more widely to those seeking appropriate funding structures to carry their business through the next few months. Banks participating in CBILS, for example, are still applying strict lending assessment criteria to businesses in need of a loan and many are failing to clear these hurdles.

Additional options for short-term funding for businesses

Once cash preservation exercises like VAT deferment are executed there may still be a necessity to consider other lending options, and reassuringly there are lots of alternative lenders and types of borrowing to consider:

Invoice discounting: high street banks, challenger banks and other specialist finance providers offer a range of terms for lending against a company’s debtor book. Typically debtors are assessed on size, customer concentration, debtor terms, ageing of debt and historical debtor profiles. Trade finance: depending on the nature of a business’s trade it may be able to raise finance against the stock on the balance sheet or set up a trade facility to fund purchases over the coming months. Asset finance: asset purchases that are requisite for ongoing operations of a company could be acquired using asset finance facilities instead of from cash reserves. Cash flow loans: profitable businesses should still be assessed on historical trading performance and the underlying viability and strength of the company. Director loans: shareholders could temporarily inject money back into the company, with terms to be agreed between the two parties. Changes to existing funding lines: current funding arrangements could be renegotiated with either the extension of facility levels, longer terms or payment holidays. Financial investment: partnering with a financial investor could prove beneficial in both the short and long term but clearly would include an equity compromise. Regional loan funds: the level of regional funding available from both European and UK government institutions remains the same. These include the Northern Powerhouse Investment Fund, Merseyside Special Investment Fund, Business Growth Fund and Greater Manchester Combined Authority.

How we can help

Lenders requirements to provide facilities such as the short-term funding options detailed above will be assessed on a case by case, business by business basis.

In most cases however lenders will require a solid business plan and a clear statement of how the funds will be used.

DTE can assist with your funding queries and applications by:

Reviewing existing financial models and business plans; helping to create financial models and business plans suitable for institutional submission; assessing funding options based on historical financial performance and the current balance sheet; providing advice on personal and corporate tax arrangements (for instance if cash is loaned to the company from shareholders); negotiating with existing funders on terms and quantum; identifying suitable funders and making introductions; and comparing funding offers and supporting discussions with new providers.

If you would like to get in touch with a member of the DTE Corporate Finance team to discuss your current situation and the ways in which specific assistance can be provided, please email us at [email protected].

This article was originally published on the DTE website. For further updates and advice for businesses regarding the current coronavirus crisis, visit our Covid-19 Business Support Hub.

Latest news

1

Three weekly domestic waste collection considered in plans Waste recycling Blackpool

Three weekly domestic waste collection considered in plans

01 Jul 2025

2

Graham Engineering confirms acquisition to a2e Industries Graham Engineering

Graham Engineering confirms acquisition to a2e Industries

01 Jul 2025

3

Training 2000 celebrate 'Good' rating by Ofsted Training 2000

Training 2000 celebrate 'Good' rating by Ofsted

01 Jul 2025

4

Fox Group acquires J Fisher and Sons Colin Fisher, Paul Fox CEO and Gary Fisher.

Fox Group acquires J Fisher and Sons

01 Jul 2025

5

Beever and Struthers strengthen leadership team with new partners Dean Curtis and Joe Diston

Beever and Struthers strengthen leadership team with new partners

01 Jul 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
LBV123 July/August Launch Event
Lancashire Business View magazine launch
Networking
16 Jul 2025

LBV123 July/August Launch Event

Burnley

08:30 - 10:30

Lancashire Built Environment Conference 2025
BEC 315 X 315 Px
Networking
25 Sep 2025

Lancashire Built Environment Conference 2025

Blackpool Football Club, Blackpool, FY1 6HX

08:30 - 13:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

Business Bike Club – July
Chamber Logo1.png.png
LBV Hub Networking
01 Jul 2025 - 01 Jul 2025

Business Bike Club – July

Various, Lancaster, LA

08:00 - 09:30

Chamber Breakfast Networking – July
Chamber Logo1.png.png
LBV Hub Networking
02 Jul 2025 - 02 Jul 2025

Chamber Breakfast Networking – July

St John's Hospice, Slyne Road, Lancaster, LA2 6ST

08:00 - 10:00

The Marketing Metrics that Matter – July 4
LBV Hub Seminars
04 Jul 2025 - 04 Jul 2025

The Marketing Metrics that Matter – July 4

Door4 Office, Burnley Wharf, Burnley, BB11 1JG

08:30 - 11:00

Tri-Site Survey Equipment Showcase
unnamed (2).jpg.jpg
LBV Hub Seminars
09 Jul 2025 - 09 Jul 2025

Tri-Site Survey Equipment Showcase

Crow Wood Hotel, Burnley, BB12 0RT

09:30 - 16:00

Chamber Summer BBQ
LBV Hub Social
17 Jul 2025 - 17 Jul 2025

Chamber Summer BBQ

The Borough, Dalton Square, Lancaster, LA1 1PP

17:30 - 20:00

Preston Tech Connection: Web3 is Dead. Or is It?
July Longer Banner.jpg.jpg
LBV Hub Networking
29 Jul 2025 - 29 Jul 2025

Preston Tech Connection: Web3 is Dead. Or is It?

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 19:30

Preston Freelancer Meet-Up: July
Longer July Banner.jpg.jpg
LBV Hub Networking
31 Jul 2025 - 31 Jul 2025

Preston Freelancer Meet-Up: July

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 11:30

Cumbria Business Expo 2025
https---cdn.evbuc.com-images-880461633-4862066883-1-original.20241022-110415.jpeg.jpg
LBV Hub Exhibitions
19 Sep 2025 - 19 Sep 2025

Cumbria Business Expo 2025

Carlisle Racecourse, Carlisle, CA2 4TS

09:00 - 15:00

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV122 Online Graphic
Subscribe now

Weekly news bulletin