Coronavirus Business Interruption Loan Scheme (CBILS)
Coronavirus Business Interruption Loan Scheme (CBILS)
The Coronavirus Business Interruption Loan Scheme (CBILS) provides financial support to smaller businesses (SMEs) across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak.
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Coronavirus Business Interruption Loan Scheme (CBILS)
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Who will provide the loan?
There are now over 40 accredited lenders providing the loans, including all the high street banks: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/accredited-lenders/
Amount of Loan Available
• In theory, up to £5m. However, in reality, lenders will look to provide loans that are realistic for the needs of each individual business.
• The amount may need to be verified by way of a cash-flow forecast or other supporting information.
Cost of the Loan
• Interest rate:
-12 month’s interest free period plus up to 12 months capital repayment holidays.
- Normal commercial interest rates will apply from lender to lender.
• The government will cover all up-front fees (arrangement fees) the lender may charge.
Term of The Loan
• Finance terms of up to six years are available for loans and asset finance facilities.
• For overdrafts and invoice finance facilities, the loan terms will be up to three years.
Security To be Provided For The Loan
• 80% guarantee: The scheme provides the lender with a government-backed, partial guarantee (80%) against the outstanding facility balance after realisation of any security taken.
• Unlike the existing similar schemes such as the EFGS , there will be no additional fee charged by the government for its guarantee.
• Insufficient security is no longer a condition to access the scheme.
Liability of The Borrower
• The borrower always remains 100% liable for the debt
• The business proprietors may also be required to provide personal guarantees above £250,000.
Eligibility to Take a Loan From The Scheme
Smaller businesses from all sectors (with a small number of exceptions) can apply for the full amount of the facility. To be eligible for a facility under CBILS, an SME must…
• Be UK-based in its business activity, with annual turnover of no more than £45m.
• Have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender.
• Loans are limited to a maximum of 25% of 2019 turnover or double the annual wage bill, whichever is greater.
Please note: If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.
When can I get a CBILS supported loan?
The scheme went live on Monday 23 March and will initially run for six months.
Is it my only option right now?
Not at all. In fact, as the lender will pay a fee to access the scheme, if they can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.
Are other non CBIL lenders still open for business, can I still borrow money via regular routes?
Yes, the majority of lenders are still open for business, although criteria has changed. There is still an appetite to fund investment property, bridging, commercial property, invoices and assets. Please get in touch to discuss your requirement.
The new CBILS scheme has many positive features at this difficult time for businesses but the reality is that obtaining the finance may be more involved and slower than has been reported in the press so we suggest businesses apply early.
There are now over 40 accredited lenders providing the loans, including all the high street banks: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/accredited-lenders/
Amount of Loan Available
• In theory, up to £5m. However, in reality, lenders will look to provide loans that are realistic for the needs of each individual business.
• The amount may need to be verified by way of a cash-flow forecast or other supporting information.
Cost of the Loan
• Interest rate:
-12 month’s interest free period plus up to 12 months capital repayment holidays.
- Normal commercial interest rates will apply from lender to lender.
• The government will cover all up-front fees (arrangement fees) the lender may charge.
Term of The Loan
• Finance terms of up to six years are available for loans and asset finance facilities.
• For overdrafts and invoice finance facilities, the loan terms will be up to three years.
Security To be Provided For The Loan
• 80% guarantee: The scheme provides the lender with a government-backed, partial guarantee (80%) against the outstanding facility balance after realisation of any security taken.
• Unlike the existing similar schemes such as the EFGS , there will be no additional fee charged by the government for its guarantee.
• Insufficient security is no longer a condition to access the scheme.
• For all facilities, including those over £250,000, CBILS can now support lending to smaller businesses even where a lender considers there to be sufficient security, making more smaller businesses eligible to receive the Business Interruption Payment.
• No personal guarantees for facilities under £250,000.
• Personal guarantees may still be required, at a lender’s discretion, for facilities above £250,000, but they exclude the Principal Private Residence (PPR) and recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied.
Liability of The Borrower
• The borrower always remains 100% liable for the debt
• The business proprietors may also be required to provide personal guarantees above £250,000.
Eligibility to Take a Loan From The Scheme
Smaller businesses from all sectors (with a small number of exceptions) can apply for the full amount of the facility. To be eligible for a facility under CBILS, an SME must…
• Be UK-based in its business activity, with annual turnover of no more than £45m.
• Have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender.
• Loans are limited to a maximum of 25% of 2019 turnover or double the annual wage bill, whichever is greater.
Please note: If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.
When can I get a CBILS supported loan?
The scheme went live on Monday 23 March and will initially run for six months.
Is it my only option right now?
Not at all. In fact, as the lender will pay a fee to access the scheme, if they can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.
Are other non CBIL lenders still open for business, can I still borrow money via regular routes?
Yes, the majority of lenders are still open for business, although criteria has changed. There is still an appetite to fund investment property, bridging, commercial property, invoices and assets. Please get in touch to discuss your requirement.
The new CBILS scheme has many positive features at this difficult time for businesses but the reality is that obtaining the finance may be more involved and slower than has been reported in the press so we suggest businesses apply early.
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Equinox Commercial Finance Ltd (FRN: 841410) are Credit Brokers and Appointed Representatives of White Rose Finance Group Ltd (FRN: 630772) Authorised and Regulated by the Financial Conduct Authority. PLEASE MAKE BORROWING DECISIONS CAREFULLY, PROPERTY OR OTHER ASSETS OFFERED AS SECURITY MAY BE AT RISK IF YOU CANNOT KEEP UP WITH REPAYMENTS.