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(Small businesses) - Coronavirus Business Interruption Loan Scheme (CBILS)

Available: CLOSED

Region: UK Wide

Overview

A new Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, enabling small and medium businesses to apply for a loan of up to £5 million, with the Government covering up to 80% of any losses with no fees.

Businesses can access the first 12 months of that finance interest-free. The Government will cover the first 12 months of interest payments.

Note – the borrower always remains 100% liable for the debt.   
                

Maximum Loan

£5 million
 

Additional criteria

For loans expected to exceed 31 December 2020, the facility should not exceed any of the below:
 
  • Twice the annual wage bill of the beneficiary (including social charges as well as the cost of personnel working on the undertakings site but formally in the payroll of subcontractors) for 2019, or for the last year available.
In the case of undertakings created on or after 1 January 2019, the maximum loan must not exceed the estimated annual wage bill for the first two years in operation;
 
  • 25% of total turnover of the company in 2019
  • The liquidity requirement of the company for 18 months

Interest Rates and fees

First 12 months of interest payments and lender-levied fees covered by the Government
 

Finance terms

Initially six years for term loans and asset finance facilities when introduced. However the Chancellor has recently announced that the term will be extended to 10 years.

Guarantee

80% government-backed against the outstanding facility balance, subject to an overall cap per lender
 

Security

At the discretion of the lender, the scheme may be used for unsecured lending for facilities of £250,000 and under.
Lenders will not take personal guarantees of any form for facilities below £250,000.

For facilities above £250,000, personal guarantees may still be required, at a lender’s discretion, but:
  • they exclude the Principal Private Residence (PPR), and
  • recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility, after the proceeds of business assets have been applied
For all facilities, including those over £250,000, CBILS can now support lending to smaller businesses even where a lender

considers there to be sufficient security, making more smaller businesses eligible to receive the business interruption payment.

 

Repayments

Majority of the high street banks are offering a capital repayment holiday ranging from 6 to 12 months at the start of the loan.
 

Provided by

British Business Bank (BBB) through participating providers
https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/current-accredited-lenders-and-partners/
 

Eligibility

  • Be UK based, with turnover of no more than £45 million per annum
  • Operate within an eligible industrial sector. A small number of industrial sectors are not eligible for support, these include:
    • Banks, insurers and reinsurers (but not insurance brokers)
    • Public-sector bodies
    • Further-education establishments, if they are grant-funded
    • State-funded primary and secondary schools  
  • Be able to confirm that they have not received de minimis State aid beyond €200,000 equivalent over the current and previous two fiscal years
  • Have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender.
  • Self-certify that it has been adversely impacted by the Coronavirus (COVID-19)
  • You can find the eligibility checklist for SMEs here https://www.british-business-bank.co.uk/wp-content/uploads/2020/04/CBILS-check-list-v10.pdf
 

How to apply

Apply directly to one of the 40+ accredited lenders and discuss your business plan asap. (Not the British Business Bank)

https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/current-accredited-lenders-and-partners/

It’s simple to apply and should take no longer than a standard application.

If the CBILS lender can offer finance on normal commercial terms without the need to make use of CBILS, they will do so.
Where the small business has a viable borrowing proposal but no, or inadequate security, the lender will consider the small business for support via CBILS.

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 be other businesses with a more urgent need to speak with a lender.
 

Information required

A typical information request list is likely to include:    
 
  • Amount – how did you come to this amount?
  • How long with this cover your business for?
  • Term of the loan
  • Purpose – details required (support in the COVID- 19 crisis)
  • Asset and Liabilities form for each Director required
  • Business plan with viable support
  • Cash flow forecast
  • List of creditors and debtors showing amounts owed and owing
  • Last 3 years accounts
  • Management information since the last statutory accounts date 
For more information see link:       
                
https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/ 
   

Additional Information

CBILS - Overview of Information
CBILS - Infographic
CBILS - SME Eligibility Checklist
CBILS - FAQs for SMEs
Frequently Asked Questions

                                              
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