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.

It is available through 40+ accredited lenders, which are listed on the British Business Bank website.

The scheme supports a wide range of business finance products, including:

  • Term loans
  • Overdrafts
  • Invoice finance
  • Asset finance

It will run for six months and provides the accredited lender with a government-backed guarantee potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’.

Key Features

  • Up to £5m facility: The maximum value of a facility provided under the scheme will be £5m, available on repayment terms of up to six years.
  • 80% guarantee: The scheme provides the lender with a government-backed, partial guarantee (80%) against the outstanding facility balance, subject to an overall cap per lender.
  • No guarantee fee for SMEs to access the scheme: No fee for smaller businesses.
  • Interest and fees paid by Government for 12 months: The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees[1], so smaller businesses will benefit from no upfront costs and lower initial repayments.[2]
  • Finance terms: Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.
  • Security: At the discretion of the lender, the scheme may be used for unsecured lending for facilities of £250,000 and under. For facilities above £250,000, the lender must establish a lack or absence of security prior to businesses using CBILS. If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.
  • The borrower always remains 100% liable for the debt.

 

Criteria

Smaller businesses from almost all sectors ([3] for exclusions) can apply for the full amount of the facility. To be eligible for a facility, an SME must:

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

 

How can businesses access the scheme?

  • 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. These lenders range from high-street banks, to challenger banks, asset-based lenders and smaller specialist local lenders.

 

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.

 

To access the scheme, follow these steps:

Step 1 :- Use our Garbutt+Elliott Cashflow Forecasting Tool to determine how much support you expect to require.

Step 2 :- Ask your Bank directly for support.

Step 3 :- If your Bank requires additional information e.g. Viability Assessment, Management Information, Forecasts – Speak to a contact from Garbutt+Elliott.

Step 4 :- If your request is approved, complete any paperwork as quickly as possible and be in regular contact with your Funder until the funds arrive.

Step 5 : If your request is declined, Speak to Garbutt+Elliott and we will help you to either appeal the decline or help you find an alternative provider quickly.

 

FAQ’s: Coronavirus Business Interruption Loan Scheme (CBILS) FAQs for SMEs

 

If you have any further queries or require further information around how to access the above contact David Streather. 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. 

 

 

[1] Following earlier discussions with the banking industry, some lenders indicated that they would not charge arrangement fees or early repayment charges to SMEs borrowing under the scheme. HM Government greatly appreciates this approach by lenders.

[2] Fishery, aquaculture and agriculture businesses may not qualify for the full interest and fee payment.

[3] The following trades and organisations are not eligible to apply: Banks, Building Societies, Insurers and Reinsurers (but not insurance brokers); The public sector including state funded primary and secondary schools; Employer, professional, religious or political membership organisation or trade unions.