CBILS Support for Mergers and Acquisitions

David Bunker
Compass Business Finance has helped bring together and support a number of successful mergers and acquisitions 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, through CBILS, 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 twelve 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 of the Exchequer 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 £10m in funding and a combined group limit of £30m, subject to qualifying criteria. Qualification for RLS funding is not dependent on whether a business has previously benefitted from BBLS, CBILS or CLBILS.

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

For more information, download our white paper on mergers and acquisitions offering insight into finding and financing your next opportunity.

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