Understanding the Coronavirus Business Interruption Loan Scheme (CBILS)

March 25, 2020

When was this introduced?

Monday 23rd March 2020

What is its aim?

The Coronavirus Business Interruption Loan Scheme is being delivered by the British Business Bank in order to support SMEs in accessing bank lending and overdraft facilities, during this difficult time.

The features of CBILS:

  • The Government will provide accredited lenders with a guarantee of 80% on each loan subject to an overall cap per lender.
  • Loans up to £5 million will be supported.
  • The Government will cover the interest and fees for the first 12 months, this includes any lender levied fees. Some accredited lenders have agreed not to charge arrangement fees. Fishing, agriculture and aquaculture businesses may not qualify for the full interest and fee payment. We can help you explore this, click here to get contact with us.
  • There is no guarantee fee for SMEs (Small and Medium Enterprises) to access the scheme.
  • The scheme can be used for unsecured lending for facilities of £250k or under. This is, however, at the lender’s discretion.
  • Lending for facilities above £250k require the lender to establish a lack or absence of collateral prior to businesses using the CBILS. Primary residential property cannot be taken as security under the scheme. To understand what can be taken as security for this scheme, click here to get in contact with a member of our experienced team.
  • The finance terms are up to 6 years for terms loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to 3 years.
  • CBILS will be demand-led, therefore there is no limit to the amount of funding the Government will put into the scheme.
  • Applications under the scheme are initially intended to run for 6 months.

Accredited lenders:

The updated list of accredited lenders can be accessed by clicking here (accredited lenders are coming on board regularly, and so this list may change).

Who is eligible to access the scheme:

UK based businesses with an annual turnover of no more than £45 million.

It is open to sole traders, body corporates, limited partnerships, LLPs or other legal entities carrying on business activity.

The business must generate 50% or more of its turnover from trading activity.

The business must operate through a business bank account.

How to access the scheme:

Do not approach the British Business Bank.

You should approach your client’s lender. If not forthcoming, approach lenders who are accredited here.

There will be great demand for this scheme via the lenders website. Phone lines are also expected to be busy and branches will have limited capacity to deal with this.

Having a borrowing proposal which, were it not for the COVID-19 pandemic, would be considered viable by the lender and for which the lender believes the provision of finance will enable the business to trade out of any short to medium term difficulties.

Our team remain working from home to support you during this time, please click here to get in contact with us.

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