The Coronavirus Business Interruption Loan Scheme (CBILS) is now available through participating lenders
How can a business access the scheme?
CBILS is available through the British Business Bank’s 40+ accredited lenders. These lenders range from high-street banks, to challenger banks, asset-based lenders and smaller specialist local lenders and are listed on the British Business Bank website here.
In the first instance, businesses should approach their own provider – ideally via the lender’s website. They may also consider approaching other lenders if they are unable to access the finance they need.
Decision-making on whether you are eligible for CBILS is fully delegated to the 40+ accredited CBILS lenders.
When can a business access the scheme?
The scheme went live on Monday 23 March and will initially run for six months.
Who qualifies for the loan guarantee scheme?
Any UK business or self-employed people with a turnover of up to £45million can apply. You need to be able to demonstrate that your business was viable before the coronavirus hit.
Self-employed includes sole traders, freelancers, and limited partnerships, operating in all sectors, and they must operate through a business bank account, and generate more than 50% of their turnover from trading activity.
How much can you borrow?
Up to £5 million.
What type of borrowing is covered?
A range of business lending products, including term loan, overdraft, invoice finance and asset finance. Not every accredited lender can provide every type of finance listed
What about security?
Banks will not assess businesses’ security position for loans up to £250,000. Over that point the business will need to show it does not have the necessary security to secure a conventional loan.
What are the terms?
Each lender can determine some of their own terms such as interest rate, but some rules apply across the board. The loans will be interest free for the first 12 months, with no upfront fee for smaller lenders. The terms will be up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.
What happens if your business can’t pay?
The government is guaranteeing 80% of individual loans, but that is for the benefit of the bank, not the borrower. Businesses will be liable for repayment of 100% of the loan.
Please note: If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.