• YK Chartered Accountants

COVID 19 Support: Questions Banks Will Want To Ask

We understand that talking to your bank can be a daunting task for most individuals, therefore it is important to be well prepared for the questions they may ask so that you can provide answers confidently.

We have therefore listed some areas which banks will want to discuss as follows:

a) Be able to provide explanations with relevant examples of how your business and cash flows have been impacted such as:

  • Loss of income as a result of forced closure due to social distancing measures

  • Supply chain restrictions

  • Lag in cash receipts as customers take longer to pay

  • Reduced demand due loss of regular customer base

b) Be able to provide evidence of actions you have taken in order to mitigate risks, and ease short term liquidity. This could include:

  • Time to Pay arrangements

  • VAT deferral

  • Coronavirus Job Retention Scheme

c) Provide short term and long term cashflow forecasts along with recent financial statements to show:

  • Ability to pay any debt or deferred liabilities

  • Sensitivity analysis under different scenarios to show anticipated cash surplus/deficit

Government Support Schemes:

The government has encouraged banks to support businesses that were viable pre and continue to be viable post COVID 19. Banks are willing to provide support through extension of existing facilities or deferment of capital repayments through ‘repayment holidays’.

Two main schemes have been introduced:

  • Covid-19 Business Interruption Loan Scheme ("CBILS")

  • Covid-19 Corporate Financing Facility Scheme("CCFFS")

These schemes are offered through British Business Bank accredited lenders. However it is important to note that the level and structure of any lending arrangement is at the discretion of the funder.

Taking up increased level of debt can have a significant impact on your business so it is important to give due consideration on the impact on your future cash flows and ability to repay, along with continual consideration of the long-term success of your business.

YK are here to help you:

We can provide support with preparing the appropriate documentation including cashflow forecasts required for dealing with your bank.

We are here to help you every step of the way by:

  • Preparing current forecasts/ability to raise additional finance for headroom.

  • Providing an appraisal of your business transaction to determine short and long term forecasts and impact on the business

  • Supporting you through preparation of appropriate documentation to help you prepare for discussions with your lender

Please get in touch for a free consultation on how we can help on

24 views0 comments