The Government have now introduced the Coronavirus Business Loan Interruption Scheme (CBILS). CBILS is a new scheme, announced by The Chancellor at Budget 2020, that can provide facilities of up to £5m for smaller businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cashflow.
Note: Information on this page has been reproduced using advice given by the British Business Bank website.
CBILS supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance. The scheme provides the lender with a government-backed guarantee potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’. The borrower always remains 100% liable for the debt.
Please note: This scheme is just one of a number of measures announced by Government and you can find full details of the temporary, timely and targeted measures to support public services, people and businesses through this period of disruption caused by COVID-19 here.
What we know so far is:
Full details and timescales have yet to be published and may not be available for a couple of weeks
You must have exhausted all other financing options
You must be able to show forecasts to prove future affordability and to be able to trade out of any short-to-medium term difficulty caused by the current crisis
Directors Guarantees are still required (business/directors are still liable for 100% of the loan)
You must have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender
Up to 12 months interest free, monthly capital repayments still due
Six of our Seventy plus strong lender panel will be offering this scheme.
Note: if the accredited lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.
Additional application notes:
Given there is likely to be a big demand for facilities once the scheme goes live, we ask you to please:
Consider applying via the lender’s website in the first instance. Telephone lines are likely to be busy and branches may have limited capacity to handle enquires due to social distancing
Consider the urgency of your need – it is possible that some businesses may be looking for regular longer-term finance rather than ‘emergency’ finance, and there may other businesses with a more urgent need to speak with a lender
What types of finance are available and who offers which type?
CBILS supports a wide range of business finance facilities, including:
Term loans
Overdrafts
Asset finance
Invoice finance
Note: Not every lender can provide every type of finance listed.
CBILS is available through the British Business Bank’s 40+ accredited lenders, which are listed on the British Business Bank website here.
Am I eligible for finance under CBILS?
The scheme is designed to support smaller businesses (SMEs) who don’t meet a lender’s normal lending requirements for a fully commercial loan or other facility, but who are considered viable in the longer-term.
To be eligible for a facility under CBILS, your business must:
Be UK based in its business activity with annual turnover or no more than £45m
Have 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 your business to trade out of any short-to-medium term difficulty
Smaller businesses from any sector[1] can apply for the full amount of the facility.
Please review our quick eligibility checklist here
Important information for SME's
Please note: The CBILS guarantee is to the lender and not the business. As with any other commercial transaction, the borrower is always 100% liable for repayment of the facility supported by CBILS
CBILS decision making is fully delegated to the accredited lenders. Any queries from a business with an active or historic EFG facility, including guarantee fee collection or alterations to their repayment profile should raise them with their lender, and not with the British Business Bank.
For further information, please read our CBILS FAQs for SMEs document
If you are an Accredited Lender, or a prospective Lender, please click here to go to our Lender pages.
[1] Exclusions: Banks, Building Societies, Insurers and Reinsurers (but not insurance brokers); The public sector including state funded primary and secondary schools; Employer, professional, religious or political membership organisation or trade unions.
This article has been written for distribution. For media enquiries please contact mark@approved-finance.co.uk
For full information on CBILS, click here to visit the British Business Bank dedicated area.