CBILS is a UK Government initiative facilitated by participating banks to provide financial support to SMEs that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak. Under the scheme, existing Clydesdale Bank business customers can borrow £10,000 to £5 million. 

Rakkaus Furniture, which was established in 2017 and supplies and installs furniture to offices, hotels, bars, restaurants, cinemas, schools and hospitals, has secured a CBILS loan to cover ongoing business costs, such as rent and utilities, and to build a new website to take online orders and open the business to retail customers.

The company is currently unable to fulfil commercial orders due to the coronavirus lockdown because customers’ premises are closed until further notice.  The funding will enable it to adapt its business model and create a new revenue stream by selling directly to private, non-commercial customers. 

Diversification into e-commerce was part of the business’ long-term strategy, but the COVID-19 pandemic has forced the company to rapidly change its plans.

Chris Arkley, managing director at Rakkaus, said: “The nature of our existing customer base, with schools, offices and hospitality businesses, means it has not been possible to deliver orders and our customers have had to stop spending money with us. We’ve had to adapt our plans and prepare to enter a consumer market quicker than we had originally planned. It’s a growth area in our industry, so was always on our horizons, but it’s a priority now.

“The support from Clydesdale Bank has been fantastic, as always. The loan application process was really straightforward, and our relationship manager was very supportive and understanding of our specific business needs. The relationship aspect of the bank’s approach means it is nothing short of first-class.  We’re always able to speak directly to the right person who can help.”

Asheley Collins, relationship manager at Clydesdale Bank, added: “This is a great example of a business recognising the challenging business environment and identifying ways to diversify to ensure the business survives through the current crisis with a new and untapped source of income. 

“We’re committed to helping all our customers through this difficult time in any way we can. While we’ve had to make changes to our business also to protect our colleagues and customers with store closures and reduced opening hours, we are still available to assist those who need our support the most.  Customers who are worried about their business should get in touch without delay to discuss their options.”

Rakkaus plans to have its new consumer website live within the next four weeks.

Mr Arkley added: “The current situation has created uncertainty, but this funding has provided a sense of relief and we feel optimistic about securing new business. Everything is changing so quickly at the moment, but we hope that, despite the difficult circumstances under which we’re diversifying, it is the start of a successful long-term strategy for us.”

• Read all of our articles relating to COVID-19 here.