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Coronavirus Business Interruption Loan Scheme (CBILS)

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

A Government backed scheme enabling lenders (accredited by British Business Bank), to offer term loans, asset finance, invoice finance and revolving credit facilities.

The backing of the Government provides lenders with a guarantee against the balance of 80% of the loan.  You (as the borrower), remain liable for the whole debt you take out.

The maximum facility under the scheme is £5 million.  In addition, the Government will cover the first 12 months of interest payments, and any lender levied charges.

Is my business eligible?

Your business must:

  • be making the application for business purposes, and your business must have been adversely affected by coronavirus
  • be UK based
  • have a turnover of up to £45 million per annum
  • generate more than 50% of turnover from trading activity
  • use the CBILS facility to support trading primarily in the UK

Security

  • For facilities:
  • below £250,000 no security should be asked for by the lender
  • above £250,000 lenders may ask for personal guarantees, but they must:
    • exclude the principal private residence and
    • recoveries under the personal guarantees must be capped at 20% of the balance of the CBILS facility after the proceeds of the business assets have been applied.

How do I apply?

By approaching one of the accredited lenders the names of which you can find here and who can be filtered by the type of facility and locations using the ‘filter by financial variant’ and ‘filter by region‘ filters on the right hand side of the page.

Decisions as to whether to eligibility criteria under the scheme are satisfied has been delegated to accredited lenders.

What information will I be asked for?

Things you may be asked to provide, include:

  • management accounts
  • cash flow forecast
  • business plan
  • historic accounts
  • details of assets

What do I need to think about?

As with any facility, you need to consider:

  • That you will be liable for the whole of the debt (notwithstanding the Government guarantee provided to the lender) so if you borrow £785k you will be liable to repay £785k plus interest (less any interest that the Government pays in the first 12 months of the term of the facility)
  • That you will be liable to pay the interest payments after the first 12 months of the facility. What interest rate is being offered?
  • Will you be able to make the repayments on the terms the lender offers, do your cashflow projections support this?
  • Is there any restriction on borrowing in your constitutional document (such as articles of association), or any other agreement or commitment you are party to?
  • What covenants will you be asked to give under the terms of the facility, can you meet these?
  • Is the business solvent – do its assets exceed its liabilities, and/or (possibly subject to receiving the facility) can it pay its debts as they fall due?
  • With the facility is there a genuine prospect of the business continuing to trade?

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