News article

Coronavirus: Changes made to the Coronavirus Business Interruption Loan Scheme

3 April 2020

Changes to Coronavirus Business Interruption Loan Scheme to benefit more businesses

The government has revised and expanded its emergency loan scheme, set up to help businesses affected by the coronavirus crisis.

The Coronavirus Business Interruption Loan Scheme (CBILS) was launched on 23 March 2020 to support SMEs which are experiencing lost or deferred revenues, leading to disruptions to their cashflow.

The scheme provides access to loans, overdrafts, invoice finance and asset finance of up to £5 million and for up to six years. It also provides the lender with a government-backed, 80 per cent guarantee against the outstanding facility balance.

Changes to the original CBILS
New measures have now been introduced to widen the access to the scheme to those smaller businesses that would have previously met the requirements for a commercial facility, but would not have been eligible for CBILS. This should significantly increase the number of businesses eligible for the scheme.

Updated scheme features

  • personal guarantees cannot be taken for any facilities below £250,000
  • personal guarantees may be required for facilities above £250,000 but will be capped at 20 per cent of the outstanding balance after business asset recoveries
  • insufficient security is no longer a condition to accessing the scheme, making more smaller businesses eligible to receive the business interruption payment

Lenders should retrospectively apply these changes for any CBILS facilities offered since 23 March 2020.

Updated eligibility criteria
Smaller businesses from all sectors can now apply for the full amount of the facility. To be eligible for a facility under CBILS, a smaller business must:

  • be UK based in its business activity, with a turnover of no more than £45m per year
  • have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender
  • self-certify that it has been adversely impacted by the coronavirus (COVID-19)

To find out more about the scheme, its eligibility criteria and how to apply, see Coronavirus Business Interruption Loan Scheme for small businesses.

New Coronavirus Large Business Interruption Loan Scheme (CLBILS)
Alongside changes to the original scheme, a new Coronavirus Large Business Interruption Loan Scheme (CLBILS) will provide a government guarantee of 80 per cent to enable banks to make loans of up to £25m to firms with an annual turnover of between £45m and £500m.

Loans backed by a guarantee under CLBILS will be offered at commercial rates of interest and further details of the scheme will be announced later this month.

Read more about the Coronavirus Large Business Interruption Loan Scheme.

First published 3 April 2020