Coronavirus Business Interruption Loan Scheme (CBILS)

The Coronavirus Business Interruption Loan Scheme (CBILS) provides financial support to smaller businesses (SMEs) across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak.

The scheme is a part of a wider package of government support for UK businesses and employees. Click here to read more at the Government’s Business Support website.

CBILS has been significantly expanded along with changes to the scheme’s features and eligibility criteria. The changes mean even more smaller businesses across the UK impacted by the coronavirus crisis can access the funding they need.

Importantly, access to the scheme has been opened up to those smaller businesses that would have previously met the requirements for a commercial facility but would not have been eligible for CBILS. Insufficient security is no longer a condition to access the scheme.
This significantly increases the number of businesses eligible for the scheme.

On 24 September, the Chancellor of the Exchequer extended the government’s three Coronavirus business interruption loan schemes and the Future Fund. The extension aligns all the end dates of the schemes to 30 November, ensuring that there is further support in place for those who may need it.

More businesses will now be able to benefit from the Coronavirus Business Interruption Loan Scheme (CBILS), the Coronavirus Large Business Interruption Loan Scheme (CLBILS), the Bounce Back Loan Scheme (BBLS) and the Future Fund.

As the schemes were announced at different times, they previously had different closing dates, with each scheme originally open for applications for a period of six months – 30 September (CBILS and Future Fund), 20 October (CLBILS), and 4 November (Bounce Back Loan Scheme).

British Business Bank operates CBILS via its accredited lenders. There are over 100 of these lenders currently working to provide finance. They include:

• High-street banks
• Challenger banks
• Asset-based lenders
• Smaller specialist local lenders

A lender can provide up to £5 million in the form of:

• Term loans
• Overdrafts
• Invoice finance
• Asset finance

CBILS gives the lender a government-backed guarantee for the loan repayments to encourage more lending. The borrower remains fully liable for the debt.

Under the scheme, personal guarantees of any form will not be taken for facilities below £250,000.

For facilities above £250,000, personal guarantees may still be required, at a lender’s discretion, but:

• 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;
• A Principal Private Residence (PPR) cannot be taken as security to support a personal guarantee or as security for a CBILS-backed facility. Personal guarantees may still be required, at a lender’s discretion, for facilities above £250,000, 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.

You can apply for a loan if your business:

• Is based in the UK
• Has an annual turnover of up to £45 million

You need to show that your business:

• Would be viable were it not for the pandemic
• Has been adversely impacted by the coronavirus

If you want to borrow £30,000 or more, you also need to confirm that your business wasn’t classed as a business in difficulty on 31 December 2019.

Businesses from any sector can apply, except:

• Banks, insurers and reinsurers (but not insurance brokers)
• Public-sector bodies
• State-funded primary and secondary schools

The maximum length of the facility depends on the type of finance you apply for and will be:

• Up to 3 years for overdrafts and invoice finance facilities
• Public-sector bodies
• Up to 6 years, for loans and asset finance facilities.

You’ll need to provide documents that show you can afford to repay the loan.

These may include:

• Management accounts
• Cash flow forecast
• Business plan
• Historic accounts
• Details of assets

The documents required will vary from lender to lender and depend on how much you’re asking for. If you’re asking your existing lender for a small loan, the process may be automated and not require all of the documents.

The lender will check that the loan is:

• For a suitable business purpose
• Affordable for you
• The right type of finance for your needs

We are offering our services to assist with your CBILS application with modest upfront cost to you. Our services will include:

• The development of the borrowing proposal which will include review of financial information provided by you.
• Utilising our networks
• Assistance with any CBILS application procedures