Levy payer success in applying for CBILS loan

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20 May 2020

GO! Southampton spoke to Caroline Osman, owner of W.J. French and Son and levy payer, on her experience on applying for the Coronavirus Business Interruption Loan Scheme (CBILS).

Was the application process easy for the CBILS loan?

Yes. I have a business manager at NatWest so I am lucky that I already have a contact with a lender as it made the process a lot quicker. After I spoke to them initially, they sent me through the forms which I had to fill out and return to them. You get three forms to fill out; one for my business, one wanting details about my personal financial situation and a cashflow template which takes the longest to complete. Once I had sent in all the forms, it took three days for my lender to approve and seven days after that for the money to come in, so it really didn’t take long at all.

One thing that my lender made clear to me is about the Government backing of the loan. If my business fails to pay back the money, 80% of the loan is guaranteed by the Government, which means they will refund the lender. However, the Government will then claim that money back off me personally, so I am still liable. Something to be aware of.

WJ French

Before you applied for the CBILS loan did you have any reservations?

I went for it straightaway, because although we have some cash reserves, we don’t know how long this situation will last and when business will return to normal. There is no interest to pay on the loan for the first year, so it was a no-brainer for us. It is like giving yourself a back-up option. The business might have been fine financially without the loan, but if trade doesn’t pick up as quickly as I’d like then I would definitely need it.  It will take some time for us to make up the income we have lost.

Would you recommend applying for a CBILS loan?

Yes, because it’s fairly low risk. If you are not getting charged interest for the first year, then think of it as a backup if you need it to relieve cashflow pressures. That said, I wouldn’t want to take on the loan if I didn’t have the confidence in my business and its ability to make the repayments.  I obviously wouldn’t want to be in a situation where I was liable for the money personally.

Can you choose how big the loan is?

Yes, initially I wanted £150,000, but my lender said that they could approve £100,000 straight away whereas anything over that would need more people to verify it and this could take longer. My lender also said that the interest rate after the first year varies depending on your company’s credit score. Luckily our credit score is good, but the rate would be higher if you don’t have a good track record.

Did you apply for either of the Government grants?

Yes, I applied for the Retail, Hospitality and Leisure grant. The application was really straightforward, it took about two minutes to complete. It took a month from me filling out the online form on the Southampton City Council website to receiving the £25,000 grant.

With those two sources of funding do you think your business is in a position to survive?

Yes absolutely. I do worry that some people might be too scared to come shopping after the lockdown rules are relaxed. We do ladies, men’s and children’s shoes, so I imagine customers will come out with their children because their feet grow and it becomes urgent that they need new footwear but for adults it’s not so necessary.

How is your business currently dealing with the pandemic?

We are preparing for when we are allowed to reopen the shop, so we can really hit the ground running. We are trying to get more hand sanitisers and protective face visors as well as getting screens built around the tills. As our job is to measure people’s feet and fit shoes at close proximity, I have ordered some custom-made Perspex screens that we can wheel in front of the customer and they will be able to put their feet underneath. It sounds a bit ridiculous, but it’s the only option we have to protect our customers and our staff.

Our busiest time of the year is back to school where we usually have a queue out of the shop. If children go back to school fulltime in September then we hope to still have the rush and need to be prepared for it.

To find out more information about CBILS go here.

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