Explained: Coronavirus Business Interruption Loans Scheme

The Coronavirus Business Interruption Loans Scheme (CBILS) provides loans of between £50,000 and £5 million to small and medium sized businesses that can no longer trade or are struggling due to the Covid-19 outbreak.
CBILS includes business loans, asset finance, invoice finance and business bank account overdrafts. Small and medium sized businesses can apply for a CBILS loan directly from one of over 60 lenders or use a business loans broker. There are no set up fees to pay and for the first 12-months there is a payment holiday, interest-free.
The scheme is managed by the British Business Bank on behalf of the Government. The Government offers lenders a guarantee of 80% on money lent through the scheme and will pay the interest costs and any fees of finance agreed under CBILS for the first 12 months. Businesses securing a loan using CBILS will receive a 12-month interest free payment holiday on the loan.

CBILS application deadline extended

Businesses now have until end January 2021 to apply.

Contact our preferred CBILS loans broker B2B to find out how they can help you to apply for CBILS loan today.

Moneyfacts.co.uk has chosen B2B finance to offer a Business Loans brokerage service. B2B are experts in business finance offering exclusive products and access to a range of lenders from high street banks and specialist lenders. Their experienced advisers provide excellent customer service and have the knowledge to match your business finance needs to the right commercial lender.
Any legal or contractual relationship will be with B2B finance.

• Borrow between £50,000 up to £5 million
• Interest rates are set by individual lenders; but we’ve seen rates between 1.4% and 8.9% so far
• Loan terms of up to ten years - those already with CBILS should contact their lender to extend their term if they wish
• 12-month interest-free payment holiday
• No arrangement fees
• No redemption or early payment penalties
• Borrow up to 25% of 2019 turnover or double your annual salary bill

Your business will need to meet the following requirements to be eligible for CBILS:

• Based in the UK
• A turnover of at least £100,000 up to £45 million in 2019
• Most lenders now require a turnover of at least £100,000 and a salary bill of £12,500 or over 
• Half of your turnover must come from your business activities/trading and cannot be from investments
• A viable trading business of at least three years prior to the pandemic
• For loans of more than £30,000 your business cannot have been a ‘business in difficulty’ on 31 December 2019
• Your business must self-certify that it is struggling and negatively impacted due to the Coronavirus emergency
• You must use CBILS for business purposes only and to support your operation of the business in the UK (although loans to support export trading may be allowed in some circumstance

Individual lenders will also have their own unique eligibility requirements as well. For example, some may restrict lending to only their current customers, to specific geographies and others may only lend to limited companies.
The public sector, banks, insurers, reinsurers, further education institutions and state funded schools are not eligible. Start-ups may find it difficult to utilise CBILS in its current form. Business wanting a loan of less than £50,000 can consider a Bounce Back Loan.

You will need to tell the CBILS lender how much your business needs to borrow and for what purpose. You will also need to decide how long you want to take to pay back the loan. In addition you will need as many of the following pieces of documentation as possible.

• Most recent management accounts
• Historic accounts
• Current business plan
• Forecasts for cashflow
• Business assets held

A business loans broker can help you to compile this and present your case to multiple lenders to increase your chances of being approved for a business loan.

If your business has been rejected for a business loan under CBILS then you can apply to another lender. If your circumstances are more complex, then you may want to consider using a business loans broker. They can assess your situation and help you find a lender most likely to accept your business for a loan.
Over the past few weeks more lenders have joined the scheme including those accepting applications from new clients. Some of these new lenders are known as alternative lenders. This generally means they accept a broader range of clients and circumstances for business loans compared to high street banks.

The British Business Bank lists over 90 lenders able to offer business loans nationwide under CBILS.