• Crisis impact spreading from most vulnerable to more established businesses

        • Research being collated daily by Funding Xchange is warning of a concerning trend that the financial impact of the COVID-19 crisis is now hitting previously safe established businesses.

          Funding Xchange is the online platform appointed by the Government to help businesses declined for loans by their mainstream bank to identify other lenders.

          In the first two weeks following the lock-down, vulnerable businesses were the predominant users of the referral process to access very small amounts of funding, with seven out of 10 applicant businesses requesting less than £15,000.

          It is now evident though that it is not just these businesses that are struggling.

          In April, from data compiled by Funding Xchange, there is a clear swing towards the next tranche of businesses. These have been able to ride out the first few weeks but are now seeking cashflow support.

          In April, up to half (47%) of businesses that have been referred to the Funding Xchange platform have traded for at least three years compared with just a third (34%) in March, indicating that there is now evidence of developing financial pressure within established businesses too.

          To reinforce the concerns, those now applying have a higher level of turnover than those active during March, with half (47%) turning over in excess of £100,000, an increase of 15 per cent from March.

          A similar trend is seen when looking at the credit quality of applicant businesses. In the first two weeks of April, nearly half (46%) of referred businesses have a higher quality credit score compared with just a third (32%) in March.

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