The UK government have announced various measures to assist businesses experiencing disruption due to COVID-19, a brief overview of which can be found here.
The two initial government-backed loan mechanisms are unprecedented, but they are limited in terms of who can access them. The Coronavirus Business Interruption Loan Scheme (CBILS) is only available to businesses with turnover of less than £45 million per year and the COVID-19 Corporate Financing Facility (CCFF) provides a mechanism whereby the Bank of England will purchase companies' issued commercial paper (a form of debt instrument issued by large companies with a credit rating; this is not possible or appropriate for many companies).
The stranded middle
It is estimated there are between 3,000 and 4,000 businesses in the UK that fall into the gap between the CBILS and the CCFF, i.e. they have a turnover above £45 million per year but are not in a position to issue commercial paper. A large enough cohort to have been termed "the stranded middle". Many of these businesses have key roles in supply chains and regional manufacturing and they require support just as other entities do.
A number of options are being considered, in terms of government assistance and commercial financial products, but until there is greater clarity on what support is available, what can these companies do?
Options for consideration:
As always, please do contact your usual Foot Anstey contact if you have any queries; our teams can assist you with any bespoke advice you require.
If you would like to get in touch, a coordinated team of experts are leading our support and can be contacted collectively using our dedicated inbox: [email protected]