CBILS provides support for mergers and acquisitions

Compass Business Finance has helped bring together and support a number of successful mergers and acquisitions (M&A) over the past 12 months.

Utilising the support offered by the Coronavirus Business Interruption Loan Scheme (CBILS) to provide funding both during the process and post-completion has been a key part of this.

Whilst COVID-19 has been a serious threat to many businesses the pandemic has, CBILS has enabled companies to restructure and stay alive, presenting an opportunity for like-minded business owners to talk about M&A possibilities.

The Office for National Statistics reported a significant rise in M&A activity towards the end of 2020, with most commentators predicting that the next six to 12 months will be even busier.

David Bunker, director of Compass Business Finance, commented: “Access to finance for M&As is very attractive with low interest rates and the ability of banks, along with non-bank lenders, to provide CBILS as well as other favourable funding structures. This is certainly a moment in time”

CBILS can provide support to M&A deals through a range of facilities, including loans, sale and hire purchase back, and invoice discounting. By utilising a combination of these variants, buyers can better meet the needs of the seller and ensure they have the funding needed post-completion to pursue their growth strategy.

The chancellor Rishi Sunak has announced key measures within the budget that will indirectly support M&A activity, including the new Recovery Loan Scheme (RLS), allowing businesses of any size to apply for up to £10 million in funding and a combined group limit of £30 million, subject to qualifying criteria. Qualification for RLS funding is not dependent on whether a business has previously benefitted from BBLS, CBILS or CLBILS.

The chancellor also announced an increased temporary tax relief on qualifying investments of 130% of the purchase value, further supporting post-completion M&A activity.

Compass Business Finance has just released a white paper on mergers and acquisitions, offering insight into finding and financing.

Compass Business Finance www.compassbusinessfinance.co.uk