While acknowledging the speed with which the Scottish and UK governments have established the CBIL scheme, Donald McKinnon, managing partner at Wylie & Bisset, has said that many businesses have rushed through applications which have subsequently been rejected because they did not meet the criteria required to qualify.

He said: “Many CBIL applications have been submitted from businesses viewing them as readily available soft loans, without substantiating what they need the money for. Applying for a CBIL is no guarantee of securing a loan and so I would advise companies to have a Plan B in the event of failing to secure a CBIL loan and look to develop a strategy for preparing their business to adapt to the new normality – beyond the next three months.”

Mr McKinnon has warned that companies seeking to simply borrow their way out of current financial difficulties risk storing up problems for the future.

He continued: “If you manage to secure a CBIL, but you don’t know where your business will be in three or six months, then that loan can quickly become a noose around your neck.

“Borrowing your way out of the current crisis is not always the answer. Rather, we would advise businesses to consider their business strategy over the medium term and ask themselves if they know what kind of position they will be in a year from now and, if they are unsure about what their turnover is likely to be at that point, ask themselves if they really want to be saddled with a loan that will need to be repaid.”

Wylie & Bisset has launched a helpline (tel 0141 566 7096) to deliver free business advice to companies that find themselves confronting various pressing financial problems as a result of the government restrictions put in place to quell the spread of COVID-19.

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