Programme: Bounce Back Loan Scheme
The COVID-19 lockdowns drove this one-woman business to shut down altogether. With her income completely dried up, the owner, Lucy, sought help via the Bounce Back Loan Scheme (BBLS) so she could move the operation fully online and market her products more widely. It was a great decision, as she quickly sold all her stock and was able to quit her day job to run the business full time.
Read what Lucy had to say in this BBLS case study.
British Business Bank: Can you tell us what your company does?
Lucy Jeffrey, founder of Bare Kind: We sell bamboo socks and donate 10% of the profits to animal conservation charities. Each animal design is linked to a specific charity so customers know which organisation they’re supporting. I live in London and the business operates out of my parent’s house in Kent.
How did COVID-19 affect your business, and why did this mean you needed funding?
I shut down operations completely during the first lockdown, so I was receiving no income for the business at all.
I took out the Bounce Back Loan so I could boost my business back up over Christmas. I’d pivoted to a completely online shipping process so we could drop parcels at a contact-free mailbox.
What do you think would have happened to your business if your application hadn’t been approved?
Sales may have continued slowly, but I wouldn’t have been able to get much growth over the Christmas period. The Bounce Back Loan allowed me to bring in someone to help with marketing and gave me a healthy budget for paid advertising so I could get my brand back out there.
As a result of that, I very quickly sold all my stock. I quit my day job to run the company full time at the end of November 2020. Without the loan, I wouldn’t have been able to take that risk.
The Bounce Back Loan allowed me to employ someone to do marketing and to advertise on social media. As a result, I sold all my stock and quit my day job to run the company full time. Without the money, I wouldn’t have been able to take that risk.
Lucy Jeffrey, founder of Bare Kind
Can you provide a specific example of how you used the funding to bring about a positive change (or changes) to your business?
The marketing was a game-changer for me. Beforehand, I was relying on fairly slow organic growth, but once I was able to get my brand in front of more people using social media advertising, it took off.
I wouldn’t have had the funding to invest in paid advertising if it wasn’t for the Bounce Back Loan. I just didn’t have the cashflow after taking in very few sales over summer.
What advice would you give to other businesses that have a Bounce Back Loan?
Exploring ways to pivot your business in such uncertain times is going to help with growth. I’m fortunate in that I’m running an e-commerce business, so I could continue selling during lockdown.
But the changes that the pandemic has forced me to make has accelerated my business into a more efficient model, and those are the types of silver linings we have to hold on to.
How did your Bounce Back Loan help your business (for example, with paying bills, paying staff, buying stock, paying down debt etc.)?
At first it was a cash float to give me a bit of a safety net. But then I budgeted to use some of it on marketing, so I could kick start my business again. I haven’t looked back!
Did the Bounce Back Loan allow you to feel more optimistic about the future of your business?
Absolutely. I was on the fence about continuing with the business, but the loan gave me the confidence to run a bit of a Hail Mary play for Christmas and I was amazed at how well it did. Since then, I’ve grown the business even more and I’m gearing up for a big Christmas in 2021.
How helpful have you found the repayment terms for your Bounce Back Loan?
So helpful that I haven’t had to worry about the loan for a whole year. I’ve been putting money aside every month so I know I’m covered for it, and when the year has passed I’ll be paying off the loan in one lump sum.
Are you paying back your Bounce Back Loan through one of the Pay As You Grow options? And if so, which option did you choose?
Yes. I chose the six-month repayment holiday.
How do the Pay As You Grow options benefit you in terms of repaying your Bounce Back Loan? Will they help your business get back on track?
I love the flexibility of these loans. I’ve been putting aside reserves to pay my loan off in full before my repayments start.
However, I may take a further six-month repayment holiday which will allow me to invest more money in stock for Christmas 2021. As a business that relies heavily on the Christmas period for sales, it’s very helpful to be able to have this option.