Why we must ensure British SMEs survive this crisis


Napoleon Bonaparte once quipped that Britain was a nation of shopkeepers. While this was meant to be an insult, it is actually a backhanded compliment about our nation’s mercantile nature. Even today, this assessment of the UK holds true.

Britain’s economy is underpinned by small-medium enterprises (SMEs). With over 5.9 million SMEs in the UK in 2019, these businesses make up 99% of all our businesses.

But the disruption caused by the Covid-19 crisis is threatening to destroy many of these businesses.

The lockdown currently being enforced in the UK means many SMEs are either unable to trade and thus earn or are facing the prospect of their customers themselves not being able to pay their invoices on time. Many will be beset by both these issues, resulting in UK SMEs running out of the cash reserves they need to survive this crisis.

According to a British Chambers of Commerce survey, nearly two-thirds of British firms only have three month’s cash in reserve or less, while 6% are already broke.

The fact is that if the Covid-19 crisis had not occurred, many of these businesses would be viable, both now and in the future.

Given all this, it is abundantly clear that being able to help these firms access liquidity is one of the most pressing hurdles our economy is facing.

The government has rightly launched an emergency coronavirus business interruption loan scheme (CBILS) to try to facilitate a cash injection.

But, in its present guise, this scheme is not working fast enough and is not being made available to enough companies.

City AM has reported that only 2,022 loans have been made to the UK’s small and medium-sized firms through the government’s coronavirus business lending scheme out of 300,000 applicants so far.

In a nutshell, only 0.65% of nearly 99% of our economy is currently getting the support it desperately needs.

This is why Salamanca Group has decided to step in and set up an advisory process to smooth this process and help Britain’s economy weather the storm.

Since our founding in 2002, we have specialised in raising finance for businesses. During these unprecedented times, we are determined to offer our nearly two decades of experience and assess business applicants for CBILS for banks.

We will be able to quickly assess applicants and decide if they are viable. Not only will this help banks be able to consider loans faster, but it will also provide much-needed certainty for the applicants.

For those who may not meet the CBILS criteria, we will be able to offer advice about whether they can raise funds through non-bank lenders as well as advise on other types of financing structures that they may want to consider.

A good example of this is a revolving credit facility, which essentially acts like an overdraft. Given many businesses may for now only need £100,000 to keep going but in a few months may need an extra £200,000, the flexibility of these types of structures are well suited to the fluid crisis the UK – and the world- is experiencing.

Many SMEs are nimble by nature, with smaller teams focused on day-to-day running of the business and as such, they may welcome external financial expertise and assistance to help unlock the liquidity they need.

Our team of experts will be able to offer this advice to SMEs as part of our advisory offer, as well as guide them on how best to make sure they are issuing invoices on time and efficiently collecting monies owed to them during this time of distress.

Please find below more details about how we can help businesses during this period or click here to download our flyer.


About our CBILS advisory

Salamanca, in partnership with Hines Associates, is working to swiftly stabilise your businesses and deliver real improvements to cash flow, liquidity and capital structure to find a sustainable outcome for your business.

We will guide you through every step of the process. Standing shoulder to shoulder with management to enable business, protect assets and maximise value for companies in stressed situations.

Our team will serve you from evaluating your likelihood of success in accessing CBILs funding through to negotiate loan terms (cost, security etc) using our market insight to make sure these are reasonable. Should you wish not to proceed with CBILS, we are well placed to suggest alternative strategies and/or sources of funds.

Please email our CBLIS Rapid Response team at CBILS@salamanca-group.com where a member of our team will be in touch within one working day to arrange a call.