Covid-19 Business Interruption Loan Scheme (CBILS) – Checking If You’re Eligible
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Covid-19 Business Interruption Loan Scheme (CBILS) – Checking If You’re Eligible

FAQs – Coronavirus Business Interruption Loan Scheme

The Coronavirus Business Interruption Loan Scheme (CBILS) was first introduced by the UK government in March 2020 to provide vital financial support to small businesses across the country. It was one of four government-backed loan schemes introduced as a result of the coronavirus pandemic and subsequent national and local lockdowns, with the scheme having now provided around £20bn of funding to more than 82,500 businesses in the UK.

The scheme offers loans of between £50,001 and £5million to small and medium-sized businesses and is administered by the British Business Bank through more than 100 approved lenders, including high street banks and alternative finance providers. The support offered by the government means businesses are not required to pay any set up fees and the loan is interest-free with no repayments for the first 12-months.

Here, we answer some of the most frequently asked questions to help you decide if a CBILS loan is the right option for your business.

When does the Coronavirus Business Interruption Loans Scheme (CBILS) end?

Since its launch, the scheme has gone through several changes, and has been extended a number of times as a result of the ongoing restrictions put in place by the UK government. Currently, the scheme is open for applications until 31 March 2021.

Am I eligible for a CBILS loan?

At Capify, we can help you determine your eligibility for a CBILS loan, however, you should first check that your business meets the following criteria:

·      Based in the UK

·      Has an annual turnover of no more than £45 million

·      More than 50% of your turnover is from trading or commercial activity in the UK

·      Be able to show your business would be viable were it not for the pandemic

·      Prove your business has been adversely impacted by the coronavirus pandemic

·      Is not a bank, insurer or reinsurer (but not insurance brokers)

·      Is not a public-sector body

·      Is not a state-funded primary or secondary school

If you think you match the criteria for a CBILS, then you can apply for a CBILS loan today. Complete our CBILS loan application here and you could be conditionally approved in a matter of hours. Although Capify does not lend under CBILS, we work closely with an accredited partner that is able to provide CBILS-backed finance.

What can I use a Coronavirus Business Interruption Loan for?

Not every accredited lender can provide every type of finance available through the CBILS. In addition to business loans, invoice finance, overdrafts and asset finance options are available. Only business loans are available through Capify’s accredited partner.

The maximum length of the facility differs depending on which you apply for. The business loans and asset finance have terms up to six years, while the overdrafts and invoice finance have terms of up to three years.

The CBILS was created to help SMEs survive a period of reduced or suspended trading, and therefore can be used for a number of different reasons such as managing cash flow, investing in stock or consolidating debt.

What do I need to prepare for my CBILS application?

In preparing your application, you’ll need to first tell your lender how much you’d like to borrow; what you’re borrowing it for, and over how long you’d like to pay it back. It’s important to take the time to work out how much you need to borrow, looking carefully at your cashflow and the things that could impact it.

 

Each lender is likely to have a different application process, but the questions and information asked for will be the same. You will also need to prove that you can afford to repay the loan and this may mean providing several documents such as: v

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

Can I repay my loan early?

Yes, a Coronavirus Business Interruption Loan can be repaid at any time without any early repayment fee.

What is the difference between the Bounce Back Loan Scheme (BBLS) and CBILS?

The main difference between these two government-backed loan schemes is the amount you can borrow. The BBLS offers small and medium-sized businesses who have been adversely impacted by coronavirus loans of between £2,000 and £50,000, up to 25% of their turnover, whilst the CBILS offers loans of £50,001 upwards.

How do I apply for a CBILS loan?

If you think you meet the criteria and that a CBILS loan is right for your business then with Capify, you can apply today. The process requires you to answer a series of questions and you could be conditionally approved in just a few hours by Capify’s accredited partner. If you have any further questions, then our team are on hand to help – you can get in touch with us here.