Coronavirus Business Interruption Loan Scheme

 

The Coronavirus Business Interruption Loan Scheme (CBILS) is a Government backed funding scheme designed to support UK businesses through the Coronavirus outbreak. The scheme is being administered through 40+ accredited Lenders. Below is a guide to the scheme for businesses looking to access it.

Request our Covid-19 Business Support Guide

This guide includes a summary of SME support packages designed to help you and your business during this current period of uncertainty.

What is the CBILS Scheme?

The Coronavirus Business Interruption Loan scheme is a government initiative that provides some protection for lenders, by guaranteeing 80% of the amount borrowed, in the event that a business defaults on loan repayments. It is not designed to act as an insurance policy for borrowers, and borrowers must ensure they meet 100% of loan repayments. The scheme is designed to allow businesses to keep accessing cash through the inevitable down turn that the Coronavirus will create.

It is important to note that the Government is not lending the money. It isn’t even giving money to the accredited lenders to lend out. Each individual lender decides whether to lend to the borrower or not, using their own lending criteria and using their own money. The scheme is very much a back stop for the Lenders.

Cashflow loans
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Key Features?

  1. 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.
  2. 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.
  3. No fee for SMEs to access the scheme: No fee for smaller businesses. Lenders will pay a fee to access the scheme.
  4. 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, so smaller businesses will benefit from no upfront costs and lower initial repayments.
  5. 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.
  6. Security: No Personal Guarantees or additional security will be taken for loans under £250,000. For facilities above £250,000 the lender may require Personal Guarantees but the must exclude personal property & recoveries are capped at 20% of the outstanding balance of the CBILS loan.
  7. Lending: If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so. Business cannot automatically access the Coronavirus Business Interruption Loan Scheme.
  8. Liability: The borrower always remains 100% liable for the debt.

In our view the Coronavirus Business Interruption Loan Scheme is potentially a life line for UK businesses. However accessing the money may not be as simple as the Government hopes as the lending decision remains the remit of the individual Lenders and is based on their own credit underwriting policies. It is important to know and understand these to ensure you get the best from the scheme.

Richard Selvey-Clinton – MD, 五月婷婷综合,亚洲欧美中文日韩在线视频 Ltd

Who is eligible?

Business cashflow loans
  1. The application must be for business purposes
  2. You must be a UK-based SME with annual turnover of up to £45m
  3. Your business must generate more than 50% of its turnover from trading activity
  4. Your Coronavirus Business Interruption Loan Scheme backed facility will be used to support primarily trading in the UK
  5. You wish to borrow up to a maximum of £5m.
  6. The business must have a borrowing proposal which, were it not for the COVID-19 pandemic, would be considered viable by the lender.

“We have found that being eligible doesn’t necessarily equate to lending. Applications need to be presented to the lenders in the correct format, with the correct information to stand the best chance of securing funding”

Richard Selvey-Clinton – MD, 五月婷婷综合,亚洲欧美中文日韩在线视频 Ltd

How do I apply?

In the first instance, businesses should approach their own provider. However you should be aware of the information they require and it should be provided in one go as drip feeding it through will result in lengthy delays to the case.

As the scheme has developed it has become common for Lenders to prioritise their existing customers. As an example, if you are banked with Natwest you will not be able to approach Lloyds.

If the accredited lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.

Bridging loan advice
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What information is required?

Invoice Finance

Financial

  1. Financial accounts covering the last 3 years.
  2. Up to date Management Accounts for this financial year.
  3. Up to date Aged Debtors Report- – to match the same time frame as Management  Accounts
  4. Up to date Aged Creditor Report- to match the same time frame as Management  Accounts
  5. Any loan schedules (list of loans you have – including pensions-  term and monthly amount)
  6. A 12 month cashflow forecast

 

Protect your credit

Non Financial

  1. How much do you want ideally?
  2. How has C-19 affected the business?
  3. What measures have you taken to reduce costs.
  4. Impact on suppliers? – are they reducing their payment terms etc…
  5. Impact of debtors? – are there risks in them not / delaying paying etc..
  6. How is the money going to keep the business operating.
  7. What measures have been taken to ensure business can pick back up again.

The Coronavirus Business Interruption Loan Scheme Lenders have become inundated with applications. Most High Street Banks have decided that they are reserving accessing the scheme and still applying their rigid lending criteria which is causing significant delays to accessing the funding which is causing business increased stress and anxiety. It is vitally important to present the application correctly and with all the required information to avoid unnecessary delays.

 

Richard Selvey-Clinton – MD, 五月婷婷综合,亚洲欧美中文日韩在线视频 Ltd

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Our team of commercial finance specialists have years of experience within the lending sector. It is also our job to stay close to the Coronavirus Business Interruption Lending Scheme so we are well placed to know how to best present the lending case and so stand a better chance to access the money 

If you have any questions please call or email us to discuss in more detail.

Alternatively please complete a Coronavirus Interruption Loan Scheme application form . We will then be in touch to discuss your requirements in more detail and collect the documentation we will need to prepare your application.

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五月婷婷综合,亚洲欧美中文日韩在线视频 Ltd is a company registered in England & Wales with company number 09478864. The registered office address is Lynwood House, Crofton Road, Orpington, BR6 8QE