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Coronavirus Business Interruption Loan Scheme

Last updated: 28th September 2020

The CBILs scheme has been extended to take applications until 30th November 2020.

Under the current Coronavirus Business Interruption Loan Scheme (CBILS) loans of up to £5 million are delivered by accredited lenders with an 80% guarantee from the government. The full list of accredited lenders can be found here.

The aim of the scheme is to help businesses to trade out of short/medium term difficulty arising as a result of COVID-19.

The facilities available include:

  • Term loans
  • Overdrafts
  • Asset finance and
  • Invoice finance

There will be no repayments for the first 12 months of a CBILS loan.  The government will pay the interest for this period and also any charges imposed by the lender via the Business Interruption Payment, details of which should be included in the CBILS paperwork which you receive from your lender.  CBILS can be spread over a period of up to 6 years.

Lenders are unable to require personal guarantees for loans less than £250,000 and for loans greater than £250,000, personal guarantees will be limited to 20% of the outstanding loan after any other recoveries from business assets and other security.  Additional security may also be required for some applicants.

The initial eligibility criteria for a CBILS is that the applicant must:

  • be a UK business;
  • have a borrowing proposal that would be have been viable had it not been for the pandemic;
  • self certify that it has been adversely affected by COVID-19; and
  • not have been a ‘business in difficulty’ as at 31 December 2019.

Applicants will also need to provide lenders with documentation including business plans, management accounts, details of assets and historic accounts.  The information required will vary from lender to lender.  Where an application has been rejected, it is possible to apply again with a different lender.

CLBILS

The Coronavirus Large Business Interruption Loan Scheme (CLBILS) is similar to CBILS but will apply for businesses with a turnover over £45 million.  At the time of writing there are 12 accredited CLBILS lenders.

Currently those businesses who fit the CLBILS criteria can apply for up to £50 million subject to a cap of 25% of turnover.  Loans can be spread over 3 months to 3 years.

From 26 May, larger businesses will be able to borrow up to £200 million under an extension to CLBILS.  The government has not yet published any further information on this.

Businesses are not able to apply for CLBILS if they are already receiving support from the Bank of England’s COVID-19 Corporate Financing Facility.

Whilst in receipt of a CLBILS, businesses will be restricted on payment of dividends and levels of senior management pay.

Details of how to apply for all of the current schemes, and eligibility criteria is available on the British Business Bank website.  Essentially, companies must be UK based, viable businesses that have been affected by coronavirus.

If you need support in preparing your application, or would like some advice on your obligations under any of these loan schemes, please get in touch.

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