Small Business CBILS – Key amendments to the existing scheme

Following the launch of the Coronavirus Business Interruption Loan Scheme, below are some key updates to the existing scheme – at 3 April 2020.

 

Personal Guarantees

Personal guarantees are not required to secure lending below £250,000. For any borrowing above £250,000 personal guarantees will be capped at 20% of the outstanding value of the loan, as the Government is providing the guarantee for the remaining 80% of the finance. This will apply to all customers that have secured a loan under the scheme since its launch on 23rd March.

Eligibility Criteria

The Chancellor is taking further action by extending the scheme so that all viable small businesses affected by Covid-19, and not just those unable to secure regular commercial financing, will now be eligible. This change is designed to enable all long-term viable businesses experiencing difficulties as a result of the coronavirus outbreak to access finance.

Coronavirus Large Business Interruption Scheme

The new Coronavirus Large Business Interruption Loan Scheme (CLBILS) will provide a government guarantee of 80% to enable banks to make loans of up to £25m to firms with an annual turnover of between £45m and £500m.

The scheme will be delivered through commercial lenders, backed by the British Business Bank. The Government will provide lenders with an 80% guarantee on individual loans for businesses that would be otherwise unable to access the finance they need.

Lenders are still expected to conduct their usual credit risk checks, but this scheme allows them to specifically support business that were viable before the COVID-19 outbreak but are facing significant cash flow difficulties, that would otherwise make their business unviable in the short term.

The new scheme will launch later this month.

 

If you have any further queries or require further information around how to access the above contact Neil Williams. Our dedicated Corporate Finance team are on hand to help guide you through various access to finance during this difficult time. For more information contact Tony Farmer.