Coronavirus Business Interruption Loan Scheme (CBILS) - NOW LIVE

23/Mar/2020

The Coronavirus Business Interruption Loan Scheme (CBILS) is now operational.

Support is being offered by 40 accredited finance providers including all major banks – therefore if you are considering this form of support you should visit the website of your bank (or one of the other providers) who will have details on their individual application processes and requirements.

The key features announced by the British Business Bank (who are overseeing the scheme) are:

Up to £5m facility

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

80% guarantee

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 guarantee fee for SMEs to access the scheme

No fee for smaller businesses. Lenders will pay a fee to access the scheme.

Interest and fees paid by Government for 12 months

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

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.

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 government have somewhat relaxed their initial eligibility guidelines to try and ensure as many smaller businesses as possible can access support. Each provider will be able to outline their criteria, however the key points are:

1. Your application must be for business purposes

2. You must be a UK-based SME with annual turnover of up to £45m

3. Your business must generate more than 50% of its turnover from trading activity

4. Your CBILS-backed facility will be used to support primarily trading in the UK  

5. You wish to borrow up to a maximum of £5m

Full details can be found at the British Business Bank website: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

As noted in previous emails, we expect the application process to rely on provision of fairly comprehensive financials and business plans – please do therefore get in touch if you require any support with these or have any further questions around these loans and we’ll do all we can to make it easy as possible.

If you have any questions regarding this or anything else please get in touch, and for regular updates, announcements and news please check our website (www.dsaprospect.co.uk) and make sure you’re following our LinkedIn page: https://www.linkedin.com/company/dsa-prospect-ltd