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Coronavirus Business Interruption Loan Scheme (‘CBILS’)

On 23rd March 2020 the Government formally announced the availability of the Coronavirus Business Interruption Loan Scheme (‘CBILS’), which will now be available through participating lenders.

This scheme is just one of a number of measures that have been announced by the Government.  Other measures may be more beneficial and obviously things are continually changing, we would therefore recommend that you access the Government website to monitor the full list of reliefs and grants that are available.  Access can be found at https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses

What is the Coronavirus Business Interruption Loan Scheme (‘CBILS’)?

The CBILS supports SMEs with access to working capital (including loans, overdrafts, invoice finance and asset finance) of up to £5m in value and for up to a 6-year repayment term.

The Government will provide lenders with a guarantee of 80% of each loan, to give lenders further confidence in providing the finance to SMEs.  However, the Borrower will always remain 100% liable for the debt.

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.

Who is eligible?

Business’s will be eligible for the scheme if:

  • They are UK based, with a turnover of no more than £45m per year;
  • They have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable the business to trade out of any short-to-medium term difficulty.

For further information on the scheme please visit https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

How to access the scheme

All major banks are offering the scheme, so to apply, you should talk to your bank or one of the 40 accredited finance providers, a full list of which can be found at https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/accredited-lenders/

For further information or advice on how COVID-19 may be affecting your business please get in touch with a member of the Baines Wilson LLP, on 01524 548494 or 01228 552600.

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