Coronavirus Business Interruption Loan Scheme (CBILS)

Category: COVID-19EQ News - Posted On: Mar 23 2020

The new scheme announced by the Chancellor at Budget 2020 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 CBILS went live today and will initially run for six months. We’ve detailed some helpful information below to help understand the new scheme.

To be eligible to apply, your business must meet the following criteria:

  • UK based business activity with an annual turnover of no more than £45m.
  • Have a borrowing proposal which, were it not for the COVID-19 pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable your business to trade out of any short-to-medium term difficulty.

The key features of the CBILS are:

  • Access to a variety of types of finance available from term loans and overdrafts to asset and invoice finance.
  • Finance of up to a maximum value of £5m.
  • Finance terms are up to six years for term loans and asset finance, three years for overdraft and invoice finance.
  • No fees to access the scheme, lenders will cover any costs.
  • Government to cover the first 12 months of interest payment and any lender-levied fees so no upfront costs and lower initial repayments.
  • At the discretion of the lender, the scheme may be used for unsecured lending for facilities of £250,000 and under.
  • If the lender can offer finance on normal commercial terms without the need for the scheme, they will do so.
  • As always, the borrower always remains 100% liable for debt. Please ensure you are able to pay this back over the term provided. We can help assess your ability if required.

The scheme is now open and can be accessed through participating lenders, these are listed on the British Business Bank website.

In the first instance, businesses should approach their own provider – ideally via the lender’s website as telephone lines are likely to be busy and branches may have limited capacity to handle enquiries.

We can discuss your own circumstances with you to help you assess the level and timing of your financing requirements. Please get in touch with your usual EQ contact who will provide support required or call one of our offices.