Applying for a Coronavirus Business Interruption Loan Scheme (CBILS)

Small to medium-sized businesses in the UK are now able to apply for finance via the Coronavirus Business Interruption Loan Scheme (CBILS) to help them deal with the operating costs of their business and to assist with maintaining cashflow.

To help you apply for a loan, we have answered some common queries below:

Am I eligible?

The scheme is available to businesses with turnovers up to £45 million with UK-based business activity. At least 50 per cent of the business’s turnover needs to be in the form of trading activity.

Decision-making on whether you can obtain a CBILS has been delegated to the accredited CBILS lenders, which range from high-street banks to smaller specialist local lenders. As such, businesses must go through the full credit assessment process for each application they make.

The lender will consider your application and is likely to check first whether you qualify for a loan on normal commercial terms or whether the CBILS is more suitable.

Some sectors will not be eligible to apply for a loan under the scheme. Full details of eligibility and an FAQ link to the British Business Bank can be found here.

What finance can I access?  

Funding can be in the form of loans, overdrafts, invoice financing or asset finance, although each lender will be able to choose which elements of the scheme it supports.

Facilities will be made available from £1,000 to £5 million, subject to a lender’s criteria. CBILS will be interest-free for the first 12 months, as the Government has guaranteed to cover these payments during this period.

The Government and the British Business Bank, which is helping to administer CBIL, have confirmed that no setup fee will be charged.

Am I liable for all of the debt?

The borrower will remain 100 per cent liable for the debt. An 80 per cent guarantee offered by Government is simply to provide some recourse for the lender in the event of a borrower defaulting on their debt.

How do I apply?

The scheme will be delivered through existing commercial lenders, backed by the government-owned British Business Bank. There are currently 40 accredited lenders able to offer the scheme, but more are being added regularly.

These are the steps that you should take in applying for a loan:

  1. Decide which form of finance you require and identify which accredited lenders can offer it. This can be done by using the British Business Bank’s filter tool by clicking here.
  2. This filter allows you to put in the region where your business is based and the type of loan you require and will provide you with a list of suitable lenders.
  3. Research what each lender is offering via their website and decide how much funding you require.
  4. Collate all necessary information to make an application, including an up to date business plan, detailed management accounts and cashflow/financial forecasts.
  5. Make an application with your chosen lender that suits your requirements. The loan application process is likely to differ from lender to lender.

The British Business Bank has indicated that it may be beneficial to seek finance first through a lender that you have an existing relationship with.

If you feel you may need to access this scheme you should be putting together the information you need to make an application. We can assist with the preparation of supporting evidence to support your claim.

To find out how we can assist you with your CBILS application or for any advice on the facilities being offered by a lender, please contact us. 

Posted in Blog, COVID-19 Knowledge Hub, Economy, SMEs, SMEs / Business.