Coronavirus Business Interruption Loan Scheme (CBILS)

The British Business Bank has recently published their guidance in relation to the Coronavirus Business Interruption Loan Scheme (CBILS).

CBILS is a new scheme that can provide facilities of up to £5m for smaller businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cashflow. The scheme supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance facilities.

 

There has been much debate surrounding the eligibility and implementation of the scheme but here is an update on some of the key details.

 

  • All lenders now looking at all applications as CBIL’s loans in the first instance (previously they were offering regular commercial loans to any business that had adequate security).
  • All lenders have been instructed that for loans less than £250,000 no personal guarantees are required from the directors / business owners and no security should be taken over the directors / owners’ personal assets.
  • Businesses still have to supply all the information required for the lender to assess the loan, however the guidance seems to be that if the business was viable before the Covid-19 crisis and will be after it, that the loan should be approved.
  • The turnover threshold for qualifying companies has been increased from £45m to £500m.
  • The scheme was previously capped at £5m of lending, this has now been increased to £25m.

 

The following documents have been published by the British Business Bank for your reference.

 

CBILS Frequently Asked Questions

CBILS Eligibility Checklist

CBILS Application Process

 

Businesses are advised to contact their lenders directly rather than the British Business Bank.