Explained - Coronavirus Business Interruption Loans | moneyfacts.co.uk
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Explained: Coronavirus Business Interruption Loans Scheme

The Coronavirus Business Interruption Loans Scheme (CBILS) has been extended for applications to November 2020. Our guide explains how the scheme works, which businesses are eligible and how to apply. Even if your bank or another lender has rejected your application, there are new lenders on the scheme that could consider your application. Our CBILS broker can help you to find a potential lender.

 

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How does the Coronavirus Business Interruption Loans Scheme work?

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.

 

Speak To A Broker

Key features of CBILS

  • 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

What are the eligibility criteria for a loan under CBILS?

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.

CBILS application checklist

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.

How to find a CBILS lender

Speak to a specialist loans broker for CBILS applications - they know which lenders are accepting applications and can help to increase your chances of securing a loan under CBILS.

What to do if your are rejected for a CBILS 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.

What is the difference between CBILS and Bounce Back Loans?

  CBILS Bounce Back Loans
Amount you can borrow Over £50,000 £2,000 to £50,000
Interest rate Set by the lender could be fixed or variable 2.5% fixed
Term Two to 10 years - at the discretion of borrower and lender Fixed for six years (now with the option to extend to 10 years)
Payment terms in the first 12 months Nothing to pay and interest free Nothing to pay and interest free

 

Which lenders offer business loans under CBILS?

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

1pm PLC 365 Business Finance ABN-AMRO Commercial Finance Adam & Company
AIB Arbuthnot Commercial Banking Arkle Finance Limited ART Business Loans
askif inclusive finance AFP assetz capital Atom
Bank Leumi (UK) plc Bank of Ireland Bank of Scotland Barclays
BCRS Business Loans Business Enterprise Fund Calverton Finance Chamber Acorn Fund
Clydesdale and Yorkshire Banking Group Compass Business Finance County Finance Group Limited Coutts
cwrt Cynergy Bank Danske Bank DSL Business Finance
Enterprise Answers Finance for Enterprise first enterprise Fleximize
FOLK2FOLK The FSE Group Funding Circle FW Capital
GC Business Finance growth lending Handelsbanken Haydock Finance
Hitachi Capital (UK) Plc HSBC UK Independent Growth Finance inFund
Investec Bank plc Invocap iwoca JCB Finance
Lending Crowd Letls Do Business leumi ABL liberis finance
Lloyds Bank Market Finance Maxxia  Merchant Money
mercia asset management msif Metro Bank NatWest
NEL Fund Managers Newable Nucleus Commercial Finance Oak North Bank
Paragon previse Robert Owen Santander
Secure Trust Shawbrook Bank Shire Leasing Silicon Valley Bank
Starling Bank The Co-operative Bank RBS THINCATS
Social Investment Business SWIG Finance Starling Bank The Co-operative Bank
RBS Thincats tower Triodos
Triple Point TSB UKSE Ulster Bank
UCIT Ultimate Finance United Trust Bank White Oak
Whiterock Finance Woodsford TradeBridge Yorkshire Bank  

 

CBILS FAQs

How is CBILS better than a standard business loan?

A standard business loan will not offer a 12-month payment holiday with no interest charged during this time. CBILS is unique in this universal offer for all businesses taking out a loan using CBILS.

Can I have a CBILS and a Bounce Back Loan?

Businesses can only apply for either CBILS or a Bounce Back Loan. Those businesses that have already been accepted for CBILS can choose to refinance this with a Bounce Back Loan.

Can I have more than one loan under CBILS?

Yes, you can have more than one loan under CBILS, and this can be with the same or another lender. You should remember though there are limits on the total amount in aggregate you can borrow under CBILS, as well as restrictions of individual lenders. For example lenders may require a certain number of payments to have been made before allowing another loan.

Can I payback my CBIL loan early?

Yes, you can pay your CBIL loan back and not incur early repayment charges. CBILS does not ban early repayment charges, but lenders have stated they would not look to include these.

What are the interest rates for CBILS?

Interest rates for CBILS are set by each individual lender. These rates can be variable or fixed. Variable rates are likely to track against the Bank of England base rate.

How quickly can I get a business loan under CBILS?

The speed of being accepted for a loan under CBILS is improving and the successful application rate has exceeded 50%. Alternative lenders that joined the scheme most recently are offering lending decisions with 24 hours of an application.

How long will CBILS be available for?

The Government launched CBILS on the 23 March 2020 and has said it will be available for six months. This meant that the original application deadline was 23 September 2020. However on 24 September 2020 the Chancellor announced an extension to November 2020.

What happens if I don't payback my loan under CBILS on time?

When a business takes out a loan under CBILS it is agreeing to be liable for the repayments, in the same way as any other type of credit agreement. If your business is not able to pay back the loan, the lender will need to recover the debt from any personal guarantee you used for the loan up to 20% of the loan value. The remainder is then covered by the Government guarantee provided on all loans made under CBILS. For loans of less than £250,000 no personal guarantee may be used, in this case the loss is covered by the Government up to 80% of the loan value at the time.

How much can you borrow under CBILS?

You can borrow between £50,000 and £5 million, however individual lenders may also have their own minimum and maximum loans within this.

What security does a business need for CBILS?

A lack of security should not stop your business getting CBILS. The guidance for CBILS states that insufficient security is not a reason to refuse a loan under CBILS.

More CBILS FAQs

Can I refinance a current business loan with a loan under CBILS?

Yes, it is possible to refinance a current debt with a loan under CBILS, if by doing so it improves your working capital and the financial stability of your business. Lenders do have certain limits to the amount they can lend to one business, so when re-financing with the same lender you may find this excludes you. However this limit will not apply if you re-finance with another lender.

Can I apply for CBILS if I am a sole trader?

Yes, sole traders that use a business bank account to manage their business accounts can apply for a loan under CBILS.

I received the Small Business Grant Fund (SBGF) payment from my local council, can I still get CBILS?

Yes the SBGF is a separate scheme to CBILS and receiving this will not automatically exclude you form CBILS.

What is the definition of a business in difficulty?

For the purposes of being eligible for CBILS, this means that on the 31 December 2019 your business had losses of greater than half of its subscribed share capital (for limited companies) or capital (for other business types.) Additional factors also include not meeting insolvency ratios, entering insolvency proceedings and receiving restricting aid. Full details are available on the British Business Bank FAQs.

Can export businesses apply for CBILS?

Businesses that conduct exporting business can apply for CBILS, although loans under £30,000 cannot be used for certain activities outside of the UK. Your lender or business loans broker will be able to let you know if your business will qualify.

Can charities apply for CBILS?

Charities can apply for CBILS, and do not need to meet the requirement for 50% of their income to be from their trading activity.

I want to extend my CBILS loan - what do I do?

You should contact your lender to request an extension, they will be able to review this and then check if this is available.

CBILS - get a fast track business loan

  • Access to multiple lenders - you could be accepted even if your bank has already declined your a
  • 12-months interest free payment holiday
  • No personal guarantee required on loans below £250,000
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Speak To A Broker

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.

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