{"id":4350,"date":"2020-05-07T08:26:43","date_gmt":"2020-05-07T08:26:43","guid":{"rendered":"https:\/\/genus-develop.go-vip.co\/promar-de\/?p=4350"},"modified":"2020-05-07T12:28:16","modified_gmt":"2020-05-07T12:28:16","slug":"bounce-back-loan-and-dairy-hardship-fund-are-these-the-answer-to-your-short-term-cashflow-problem","status":"publish","type":"post","link":"https:\/\/www-dev.promar-international.com\/de\/bounce-back-loan-and-dairy-hardship-fund-are-these-the-answer-to-your-short-term-cashflow-problem\/","title":{"rendered":"Bounce Back Loan and Dairy Hardship Fund \u2013 Are these the answer to your short term cashflow problem?"},"content":{"rendered":"\n

By Andrew Suddes<\/strong><\/p>\n\n\n\n

On May 4th, the government announced its latest measures (Bounce Back Loan) to tackle the economic damage done by the COVID-19 Pandemic. On May 6th the Dairy Hardship Fund was unveiled.<\/strong><\/p>\n\n\n\n

You have gone from no hope of financial support to being spoilt for choice. Yet, do these provide the light at the end of the tunnel for your business?<\/p>\n\n\n\n

Dairy Hardship Fund<\/h2>\n\n\n\n

To deal with the Hardship Fund first, this is for specifically English dairy farmers who have suffered a minimum loss of 25% in income in April and May. Primarily, due to the complete loss of demand.<\/a><\/p>\n\n\n\n

Benefiting those of you who have been worst affected. Acting as a financial bridge to make up the losses occurred from dumped milk or accepted deferred payments on your contracts. You can apply for a flat-rate payment of \u00a310,000, more details are available here.<\/a><\/p>\n\n\n\n

Bounce Back Loan<\/h2>\n\n\n\n

On hearing about the new government bounce back loan scheme I contacted a few clients who I thought might be interested. We discussed the scheme details and how they could put the money to good use. The discussions took place at lunchtime by the evening, both businesses were in receipt of facility letters from their banks. As my client put it, \u201c\u2026the easiest \u00a350,000 I have ever asked for\u201d.<\/em><\/p>\n\n\n\n

The Bounce Back Loan is self-certified and requires several questions to be answered (lender dependent) before funds are released.<\/p>\n\n\n\n

Any business can apply for a loan of 25% of their annual turnover up to a maximum of \u00a350,000. Any application for this loan would prohibit your business from applying for a separate facility under the alternative Coronavirus Business Interrupting Loan Scheme (CBILS).<\/p>\n\n\n\n

You must watch out for some obvious pitfalls. Feedback from banking contacts suggests that they our uncomfortable with unviable businesses accessing the funds, from the very relaxed credit process.<\/p>\n\n\n\n

The system appears to be vulnerable to abuse from fraudsters and businesses with a patchy credit history. If you are going to apply for these funds, you do not even have to check in with your manager. It is the Writer\u2019s opinion that not doing so represents \u201cbad form\u201d and it would appear to be courteous to at least hold this discussion prior to making a final decision.<\/p>\n\n\n\n

Final decisions<\/h2>\n\n\n\n

It is rarely good advice for a business that is struggling and has structural problems to borrow more money. However, there are plenty of farm businesses out there now who are otherwise viable but experiencing serious cash flow difficulties due to the market ructions caused by the coronavirus pandemic.<\/p>\n\n\n\n

These businesses would do well to take advantage of both schemes outlined and put the money to good use some examples of this may be:<\/strong><\/p>\n\n\n\n