The Coronavirus Business Interruption Loan Scheme (CBILS)?>
The Coronavirus Business Interruption Loan Scheme (CBILS) is a government initiative to help UK businesses affected by coronavirus to access finance. It provides financial support to businesses across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak.
To make the loans more affordable, there are no repayments for the first 12 months. You won’t be charged interest during that time or need to pay a fee to take out the loan, the Government will cover these for you. There are also no fees for early settlement the loan.
The Government (British Business Bank) has now accredited lenders over 90 lenders, including several focused on development funding. We can help you negotiate the market and find the lender right for you.
Tell me more about CBILS
Unlike the Bounce Back loan scheme, which advances sums of up £50,000, a CBILS loan requires more business viability and credit checks and will normally take slightly longer to arrange than the Bounce Back scheme.
In addition, interest rates for CBILS loans are higher than the 2.5% mandated by the Government for the Bounce Back scheme because CBILS lenders are free to set their own interest rates and in most cases, they are using their usual commercial interest rates. However, no matter which lender you chose to borrow from, there are no set-up fees and no capital or interest for the first 12 months.
CBILS lenders will require security and can take recovery action if the business falls into difficulty. The maximum loan under CBILS is £5 million.
For more information, you can check out the British Business Bank website or call us 07534 186 689 to help you find the right CBILS lender.
Frequently asked questions:
Can a business have a Bounce Back loan (BBLS) and a CBILS loan?
If you have already taken a BBLS loan you can still get a CBILS loan but must refinance the earlier loan. There are limits on the amount of refinancing that any lender can provide under the CBIL scheme and your businesses affordability for the debt will be taken into consideration.
Who is eligible for a CBILS loan?
- UK-based business that’s been adversely affected by the coronavirus
- Turnover of up to £45 million
- 12 months of trading history
- Over 50% of turnover from trading activity (e.g. not from investments)
- The loan is for business purposes
- Businesses must be trading mostly in the UK
- Available for limited companies, sole traders and partnerships
How much can a business borrow?
Your requirements and circumstances will depend on which lender we approach and lenders have different limits but the overall scheme has a maximum limit of £5 million.
What documents are required?
The documents required depending on your business circumstances and capital requirements but at a minimum, you must submit your business bank statements for the last 3 months and the latest full accounts.
What is the interest rate?
Rates will vary depending on the lender and can range from 2.6 – 12% APR.
APR means annual percentage rate of charge. It includes the cost of both interest and fees that you’ll need to pay, making it easier to compare with other providers.
What security is required for a CBILS loan?
CBILS loans up to £250,000 require no personal guarantee. The government will provide the lender with a partial guarantee of 80% on behalf of the business. However, the business is liable for the full loan amount and any lender will take all legal steps to recover the debt.
The Government’s guarantee is to the lender, not the business. Only when the business is unable to repay would the government’s guarantee come into effect.
Loans for larger amounts will require asset security.
What terms are available for CBILS loans?
You can borrow up to 6 years with nothing to repay for the first 12 months.