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 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.
Your business will need to meet the following requirements to be eligible for CBILS:
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.
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.
|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|
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|
|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|
|Triple Point||TSB||UKSE||Ulster Bank|
|UCIT||Ultimate Finance||United Trust Bank||White Oak|
|Whiterock Finance||Woodsford TradeBridge||Yorkshire Bank|
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.
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.
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.
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.
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.
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.
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.
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.
You can borrow between £50,000 and £5 million, however individual lenders may also have their own minimum and maximum loans within this.
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.
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.
Yes, sole traders that use a business bank account to manage their business accounts can apply for a loan under CBILS.
Yes the SBGF is a separate scheme to CBILS and receiving this will not automatically exclude you form CBILS.
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.
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.
Charities can apply for CBILS, and do not need to meet the requirement for 50% of their income to be from their trading activity.
You should contact your lender to request an extension, they will be able to review this and then check if this is available.
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