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Coronavirus Business Interruption Loan Scheme

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What is the loan available for?

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.

CBILS guarantees facilities up to a maximum of £5m available on repayment terms up to six years for term loans and asset finance. For overdrafts and invoice finance facilities, terms will be up to three years. The scheme provides the lender with a government-backed partial (80%) guarantee against the outstanding facility balance.


There is no guarantee fee for SMEs to access the scheme. 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. You (the SME) will therefore benefit from no upfront costs and lower initial repayments.


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, the scheme requires the lender to establish a lack or absence of security prior to businesses using CBILS. Primary Residential Property (PPR) cannot be taken as security under the scheme. If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.

Percentage of project cost

The scheme provides the lender with a government-backed, partial guarantee (80%) against the outstanding facility balance, subject to an overall cap per lender.

Any eligibility criteria?

Smaller businesses from all sectors* 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, and for which the lender believes the provision of finance will enable the business to trade out of any short-to-medium term difficulty.
  • generate more than 50% of its turnover from trading activity. 

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. 

*For more information on this, visit https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

What loan amounts are available?

The maximum value of a facility provided under the scheme will be £5m, available on repayment terms of up to six years.

There will be no guarantee free for SMEs to access the scheme. Lenders will pay a fee to access the scheme.

What are the loan terms?

There will be no guarantee free for SMEs to access the scheme. 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 business 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.

The borrower always remains 100% liable for the debt.

Who provides the loan?

The loan is provided by CBILS, a scheme run by the British Business Bank. 

How to apply?

CBILS is available through the British Business Bank’s 40+ accredited lenders, which are listed on the British Business Bank website here.

In the first instance, businesses should approach their own provider – ideally via the lender’s website. They may also consider approaching other lenders if they are unable to access the finance they need.

Decision-making on whether you are eligible for CBILS is fully delegated to the 40+ accredited CBILS lenders. These lenders range from high-street banks, to challenger banks, asset-based lenders and smaller specialist local lenders.

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.

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 enquiries 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

Please click HERE for more information on how to apply for the Coronavirus Business Interruption Loan Scheme (CBILS).

Contact information:

British Business Bank

Address

Steel City House, West Street, Sheffield, S1 2GQ

https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

0114 206 2131

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