The temporary Coronavirus Business Interruption Loan Scheme (CBILS) supports small and medium-sized businesses with access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to six years.
Your business must:
1. Be UK-based in its business activity
2. Have an annual turnover of no more than £45 million
3. Have a borrowing proposal which the lender:
- would consider viable, were it not for the COVID-19 pandemic
- believes will enable you to trade out of any short-term to medium-term difficulty
Businesses from any sector can apply, except the following:
- Banks and building societies
- Insurers and reinsurers (but not insurance brokers)
- Public-sector organisations, including state-funded primary and secondary schools
Facilities supported by the guarantee will be provided by participating commercial lenders. Businesses should check the British Business Bank website to find out which lenders are able to provide the type of finance they are looking for. They should then approach a lender or lenders as they would normally. Individual lending decisions are at the discretion of these accredited lenders, and businesses will remain responsible for repaying any facility that they take out.
Businesses with a turnover above £45m may be entitled to the Coronavirus Large Business Interruption Loan Scheme.
You should apply via your lender’s website or through one of the 40 accredited finance providers offering the scheme. The lender has the authority to decide whether to offer you finance.
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 23 March.
Given there is likely to be a big demand for facilities, businesses should consider applying via the lender’s website in the first instance. Telephone lines are likely to be busy and branches may have limited capacity to handle enquiries due to social distancing.
The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website.