Thursday 26th March 2020 – Coronavirus Business Interruption Loan Scheme (CBILS)
About the scheme
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. Read more at the Government’s Business Support website.
How it works
British Business Bank operates CBILS via its accredited lenders. There are over 40 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
– 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.
Key features of the scheme
Finance of up to £5 million – The maximum value of a facility provided under the scheme is £5 million, available on repayment terms of up to six years.
Guarantee to the lender to encourage them to lend – The scheme provides the lender with a government-backed, partial guarantee against the outstanding balance of the finance. The borrower remains 100% liable for the debt
Government pays interest and fees for 12 months – The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied charges.
Finance Terms – For term loans and asset finance facilities: up to six years. For overdrafts and invoice finance facilities: up to three years.
Security – If a lender can offer finance on normal commercial terms without making use of the scheme, it will do so. The lender can choose to use the scheme for unsecured lending for facilities of £250,000 and under. For facilities above £250,000, it must establish that the borrower is unable to provide security, before it uses CBILS. Primary residential property cannot be taken as security under the scheme.
No guarantee fees for businesses – There are no guarantee fees for SMEs. Lenders pay a fee to access the scheme.
How to Apply
Coronavirus Business Interruption Loan Scheme (CBILS) – for Businesses and Advisors – https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/for-businesses-and-advisors/
Coronavirus Business Interruption Loan Scheme (CBILS) – Current Accredited Lenders and Partners – https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/current-accredited-lenders-and-partners/
More information available at: https://www.businesssupport.gov.uk/coronavirus-business-support/
British Business Bank plc is the holding company of the group operating under the trading name of British Business Bank. It is a development bank wholly owned by HM Government which is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). The British Business Bank operates under its own trading name through a number of subsidiaries, one of which is authorised and regulated by the FCA. British Business Bank plc and its subsidiary entities are not banking institutions and do not operate as such. Accordingly, none of the British Business Bank group of companies takes deposits or offers banking services.