Coronavirus Business Interruption Loan Scheme available now

The Coronavirus Business Interruption Loan Scheme (CBILS) is now available to businesses who need help following disruption to their cashflow as a result of the coronavirus outbreak.

Announced by Chancellor of Rishi Sunak at his Budget on 18th March and revised on 2nd April, CBILS is just one of a series of measures to help businesses during the COVID-19 pandemic. It has been designed to help eligible sector UK businesses with a turnover of up to £45 million to access Government-backed finance of up to £5 million and is delivered by the British Business Bank via accredited lenders and partners.

The Government has promised to cover interest payments and any lender-levied fees for businesses for an initial period of up to 12 months. CBILS will also provide lenders with a Government-backed guarantee for up to 80% of the outstanding balance of eligible facilities.

The scheme can support a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance. As it provides the lender with a Government-backed guarantee, this could mean a potential ‘no’ credit decision from a lender could become a ‘yes’. The borrower always remains 100% liable for the debt.

CBILS key features

• The maximum value of a facility provided under the scheme will be £5m, available on repayment terms of up to six years.
• The scheme provides the lender with a government-backed, partial guarantee (80%) against the outstanding facility balance, subject to an overall cap per lender.
• No fee for smaller businesses. Lenders will pay a fee to access the scheme.
• The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.
• Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.
• At the discretion of the lender, the scheme may be used for unsecured lending for facilities of £250,000 and under. For facilities above £250,000, personal guarantees will be limited to 20% of any amount outstanding on the CBILS lending after any other recoveries from business assets. The lender can grant lending where there is sufficient security and does not need to consider other finance available on normal commercial terms.
• The borrower always remains 100% liable for the debt.

Is my business eligible for CBILS?

Smaller businesses from any sector can apply for the full amount of the facility. However, to be eligible for a facility under CBILS, any small or medium sized business 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 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 difficulty.

We can help

It’s always important to get good advice and that’s particularly true at present. If you have any questions about how to access CBILS please talk to us on 0141 632 1863 or use our online enquiry form for a free initial consultation. We can offer initial consultations, advice and support over the phone if you have any concerns about face-to-face meetings.

For our latest COVID-19 news and guidance for your business, visit our dedicated Coronavirus Hub.
We will be updating it regularly as we continue to monitor and digest all the latest information.

Date published 24 Mar 2020 | Last updated 23 Sep 2020