Paul Trendell, co-founder and CEO of boutique operator Victus Soul, has slammed the way banks are handling the government's Coronavirus Business Interruption Loan Scheme (CBILS).
The scheme was set up to support small and medium-sized businesses, with an annual turnover of up to £45m. Through it, businesses are meant to be able to access loans, overdrafts, invoice finance and asset finance of up to £5m for up to six years.
The scheme is being delivered through commercial lenders, but backed by the government-owned British Business Bank.
Speaking to Health Club Management, Trendell said Victus Soul's application for CBILS had been rejected by Lloyds Banking Group, saying: "We got turned down despite being cashflow positive within 12 months of launch, profitable for the last quarter prior to the COVID-19 outbreak and employing more than 25 people.
"We also have no debt and an asset base of more than £1m.
"The reason we were given was that we 'cannot demonstrate affordability from our last year of financial statements'.
"Startups, never mind profitable startups, have no chance. What a joke."
Trendell also raised the issue on LinkedIn, igniting a lively discussion on the topic, with many posting replies, declaring they had had a similar experience.
"I fear CBILS is going to turn out to be an absolute shambles," said one commentator.
"It is outrageous. If they do not help a business like yours, who are impacted by circumstances beyond anyone's control, who will they help?" said another.
It is also clear that the company isn't the only one to have been turned down for CBILS.
One commentator added: "We had the same story with another bank, seems they all have a short memory. When they had no funds, we bailed them out."
Victus Soul opened its first site, a 6,000sq ft studio, in London's Aldgate in November 2018. Like many other operators, it has adapted its model since the lockdown and is now delivering live online classes via Zoom. The operator is offering exercises the first class for free – the schedule and bookings are available on the Victus Soul website:
www.victus-soul.com
