The Coronavirus Business Interruption Loan Scheme (CBILS), delivered through British Business Bank accredited lenders and partners, is designed to support the continued provision of finance to UK smaller businesses (SMEs) during the Covid-19 outbreak.
It supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance facilities. Please note that for term loans and overdrafts, the minimum amount a lender can offer under CBILS is £50,001.
If you’ve experienced lost or deferred revenues and disruption to your cashflow owing to the COVID pandemic, this could help.
Under the CBILS scheme we can offer a range of business finance options, including;
- Hire Purchase
- Finance Lease
- Business Loans
Key scheme features:
- Term loans and overdraft facilities from £50,001 to £3m.
- Finance lease and hire purchase facilities from £5,000 to £1m.
- No guarantee fee for small businesses to access the scheme: No fee for smaller businesses.
- Interest and fees paid by the Government for 12 months: 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.
- Finance terms: Finance terms are up to five years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.
- Guarantee to the lender: The scheme provides the lender with a government-backed, guarantee against the outstanding facility balance. The borrower always remains 100% liable for the debt.
- Principal Private Residence (PPR) – A borrowers/guarantors PPR cannot be taken as security to support a Personal Guarantee or as security for a CBILS- backed facility.
- The borrower always remains 100% liable for the debt.
Additional notes on security:
- No personal guarantees for facilities under £250k: Personal guarantees of any form cannot be taken under the scheme for any facilities below £250k.
- Personal guarantees for facilities above £250k: 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 CBIL backed facility.
- Security: 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 .
Smaller businesses from all sectors can apply for the full amount of the facility. To be eligible for a facility under CBILS, a smaller business must:
- Be UK based in its business activity, with turnover of no more than £45m per year.
- 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 impacted by the Coronavirus
Please note: The following are not eligible under CBILS:
- Banks, Insurers and Reinsurers (but not insurance brokers);
- public sector bodies and;
- state funded primary and secondary schools.
How can I check whether I’m eligible for CBILS support?
If you can answer “yes” to all of the following questions, you may be eligible for CBILS. All decisions are subject to credit decision:
- Is your enquiry for finance as a result of being impacted by coronavirus?
- Are you a small or medium-sized enterprise with a turnover of less than £45m?
- Does, or will, your business generate 50% or more of its income from trading activity?
- Is your business based in the UK, and will the funding be used to support trading in the UK?
- Is the main reason for seeking finance to support investment, increase working capital, fund business growth or acquisitions?
- Are you applying for finance in Pound sterling (GBP)?
Are there any restrictions to which businesses can apply for CBILS?
- Under the scheme, the Government provides a guarantee to the lender. It’s important to note that you remain liable for 100% of the outstanding debt. Where defaults occur, we follow our standard commercial recovery procedures, including the realisation of security, before we make a claim against the Government guarantee for any shortfall.
Businesses from the following sectors cannot apply:
- Banks, Insurers and Reinsurers (but not Insurance Brokers), Public-sector bodies, Further-education establishments if they are grant funded, State Funded Primary and Secondary School
- CBILS advances of £30,000 and above, are only available to borrowers who are not an “Undertaking in Difficulty” as at 31 December 2019 under Article 2 (18) of the Commission Regulation (EU) No 651/2014 (17 June 2014), examples of which are:
- businesses that have accumulated losses greater than half of their subscribed share capital, or
- businesses that entered into collective insolvency proceedings or fulfilled the criteria to be put into collective insolvency proceedings, or
- businesses that have previously received rescue aid that is yet to be reimbursed or restructuring aid and are still under a restructuring plan.
Getting started with your CBILS application – the scheme runs until 31st March 2021
To start your application, simply complete the form below and one of our team will be in touch within 24 hours.*
FAQs for SME’s from the British Business Bank HERE
Managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy & Industrial Strategy. British Business Bank plc is a development bank wholly owned by HM Government. It is not authorised or regulated by the PRA or the FCA.
T&Cs will apply, subject to status and affordability. Any asset used as security may be at risk if you do not repay any debt secured on it.
Some of our most frequently asked questions:
Can I apply for a CBILS Loan if I’ve already had a Bounce Back Loan?
You can’t have both live at the same time. However, some lenders are happy to agree a CBILS facility with the condition of repayment of the bounce back loan.
Can I have more than one CBILS product?
You can take several CBILS loans with different providers, providing the total amount you borrow is no more than 25% of your turnover, double your annual wage bill, or enough to cover liquidity needs for 18 months from the date of borrowing. The total CBILS amount cannot be higher than £5m.
Do I apply via my Bank?
When CBILS loans were first introduced back in April, they were initially offered by banks only, which is why many SME owners believe that this is the only place you can get them. However, as the backlog of applications built-up and waiting times for a response grew, the Government introduced a raft of accredited lenders who were able to offer CBILS facilities for Loans, Hire Purchase and Asset Finance facilities.
While the standard CBILS offering includes benefits such as the Government paying the first 12 months of interest and upfront fee on your behalf, as well as no personal guarantees on loans up to £250,000, other lenders are able to offer 12 months deferred repayment terms and have no early settlement fees.
Do CBILS loans require a personal guarantee or security?
As part of the CBILS loan scheme, the Government requires that personal guarantees are not required on loans under £250,000.
On amounts above £250k, you may be asked to give a debenture on your business as the personal guarantee is only attached to 20% of your outstanding loan amount.
Are CBILS loans expensive?
A CBILS loans can actually work out to be more cost effective! The Government pays the first 12 months of interest (where interest is typically at its highest) and upfront fee on your behalf. This could save you hundreds, if not thousands of pounds in comparison to a non-CBILS business loan.
And with no early settlement fees, if you repay your loan in full before the end of your first year, it won’t have cost you anything.
How long does the process take?
Because of the early press coverage on extended waiting times for CBILS application to be processed, many small business owners presume that CBILS loans generally take a long time to approve. This is not the case — in the last six months we have processed hundreds of CBILS applications and on average can give you an approval in 24 hours!*
*24 hour turnaround as an average, if applied during normal office hours.