CBILS: Coronavirus Business Interruption Loan Scheme

This Budget 2020, the Chancellor has introduced a new scheme called the CBILS. This programme can provide up to £5M for small businesses across the UK who are experiencing a loss of revenue and disruptions to their cashflow caused by COVID-19.

CBILS supports a wide variety of business finance products including:

• Term Loans
• Overdrafts
• Invoice Finance
• Asset Finance

While the borrower always remains 100% liable for the debt, this scheme provides the lender with a government-backed guarantee which increases the borrowers chances of being approved.

Key Features:

• Up to £5M facility: £5M is the maximum value of the facility provided under the programme, available on repayment terms of up to 6 years.
• 80% government-backed partial guarantee: the programme provides the lender with a government-backed, 80% partial guarantee against the outstanding facility balance, subject to an overall cap per lender.
• No guarantee fee for SMEs to access the scheme: no fee for small businesses, instead the fee will fall on the lender.
• Interest and Feeds paid by the Government for 12 months: no upfront costs and lower initial repayments for small businesses as the Government will make a Business Interruption Payment to cover the first year of interest payments and any lender-levied fees.
• Finance Terms: up to 6 years for term loans and asset finance facilities and up to 3 years for overdrafts and invoice finance facilities.
• Security: 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 lender must establish a lack or absence of security prior to businesses using CBILS. If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.
• The borrower always remains 100% liable for the debt.

Is your business eligible? Take a look at the criteria below.

Small businesses from all industries can apply for the full amount of the scheme. To be eligible for CBILS, an SME (small-to-medium enterprise) must:

1. Be based in its business activity in the UK and have an annual turnover of less than £45m
2. Have a borrowing proposal and business plan which, were it not for the current pandemic, would be considered viable by the lender, and for which the lender believes the facility will allow the business to trade out of any short-to-medium term difficulty.

When possible to offer finance on normal commercial terms, without the use of the CBILS scheme, the lender will do so.

The CBILS is just one of hundreds of funding programmes available to small business owners across the UK. Read more about UK small business funding support here.

If you are applying for CBILS or another scheme and would like to have an expert in your industry review your business plan and funding application to ensure they are up to current standards before you submit, register here.

Want to learn more about CBILS and other funding programmes for UK small businesses? Have questions? Give us a call at 020 3880 8554