Loans: 50% of manufacturers are seeking £643.5m CBILS funding before end of April

50% of manufacturers are seeking £643.5m CBILS funding before end of April Cash: Two-thirds report shrinking order with less than £50k cash before they run out of money

Two-thirds report shrinking order with less than £50k cash before they run out of money Revenues: 64% have halved order expectations for 2020 but are optimistic that the business environment will normalise by the end of the year

UK manufacturers are facing a precarious future according to insights1 from fintech business lender MarketFinance. Over two thirds (68%) reported their order books have halved in the last 30 days. To compound matters, the majority (67%) have less than £50,000 cash and without any support will run out of money before the end of the month.

Loans

Over half (51%) of manufacturers are interested in accessing funding through the Coronavirus Business Interruption Loan Scheme (CBILS, which offers up to £5m interest free for the first year, over 6 years) to shore up their business for the medium to long term. The majority (33%) of manufacturers are seeking an average loan of £62,500, equivalent to £417m for the sector2. Just 4% were seeking a £10,000 loan, one in ten (11%) need £17,500 and a further 3% need £300,000. If they are unsuccessful in securing a business loan, most reported they would turn to invoice finance (finance on outstanding invoice payments owed to them).

Cash flow

With March revenues halved and near term prospects looking uncertain, most manufacturers (64%) have revised down their order books for 2020 by 40-50%. They are seeking short term solutions to remedy finance concerns. They ranked a larger overdraft facility as first preference before seeking a business credit card and in third place, using invoice finance as a means to inject working capital into the business.

Anil Stocker, CEO at MarketFinance, commented: “Manufacturers are in urgent need of support. All the industry indicators show orders are down and unlikely to recover much this year. They have been hit hard by the COVID-19 outbreak. A number of firms have had to shut their doors and some that remain open are pivoting to make products that support the national effort to contain the spread of the virus. It’s imperative that we back these businesses.”

Advice

Most (36%) manufacturers are turning to their accountants for advice on what to do next before consulting their friends and family (19%). One in five (18%) are seeking advice from their bank manager. Business owners feel their accountants are the most accessible given the remote working environment.