The Coronavirus Business Interruption Loan Scheme (CBILS) is now available through participating lenders.
Borrow up to £250,000 to manage the financial impact of Covid-19 and have nothing to pay for 12 months.
About The Scheme
The Coronavirus Business Interruption Loan Scheme (CBILS) provides financial support to smaller businesses (SMEs) across the UK that are losing revenue and seeing their cashflow disrupted, as a result of the COVID-19 outbreak.
The scheme is a part of a wider package of government support for UK businesses and employees. See our Job Retention scheme – furlough guidance for more information.
To make the loans more affordable, there's no repayments for the first 12 months. You won't be charged interest during that time or need pay a fee to take out the loan, as the Government will cover this for you. If you want to settle the loan early, there are also no fees for full early repayment.
CBILS has been expanded incorporating new features and eligibility criteria. The changes mean even more smaller businesses across the UK can now access the funding they need – this significantly increases the number of businesses eligible for the scheme.
How Does It Work?
British Business Bank operates CBILS via its accredited lenders. There are currently over 40 lenders working to provide finance. They include:
- High-street banks
- Challenger banks
- Asset-based lenders
- smaller specialist local lenders
A lender can provide up to £5 million in the form of:
- Term loans
- Overdrafts
- Invoice finance
- Asset finance
Loans for large firms up to £200m
The UK government has raised the limit companies can borrow through its business loan scheme from £50m to £200m following criticism that many larger firms were unable to access credit to keep them solvent during the coronavirus lockdown. The maximum loan size available through the coronavirus large business interruption loan scheme increased from the 26th April.
The maximum amount available through CLBILS to a borrower and its group has now increased from £50m to £200m. Term loans and revolving credit facilities over £50m will be offered by CLBILS lenders which have secured additional accreditation. The maximum size for invoice finance and asset finance facilities remains at £50m.
Companies borrowing more than £50m through CLBILS will be subject to further restrictions on dividend payments, senior pay and share buy-backs during the period of the loan.
The Treasury has said the extension will ensure organisations that failed to qualify for the Covid Corporate Financing Facility (CCFF) loan scheme managed by the Bank of England would have access to enough finance to meet cashflow needs during the outbreak.
CBILS gives the lender a government-backed guarantee for the loan repayments to encourage more lending.
The borrower remains fully liable for the debt.
Under the scheme, personal guarantees of any form will not be taken for facilities below £250,000.
For facilities above £250,000, personal guarantees may still be required, at a lender's discretion, but:
- Recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied;
- A Principal Private Residence (PPR) cannot be taken as security to support a personal guarantee or as security for a CBILS-backed facility
The Key Features Of The Scheme (in summary):
- Finance up to £5 million
- The scheme provides the lender with a government-backed, partial guarantee against the outstanding balance of the finance - the borrower remains 100% liable for the debt.
- Government pays interest and fees for 12 months
- For term loans and asset finance facilities: up to six years.
- For overdrafts and invoice finance facilities: up to three years.