Explained: Coronavirus Business Interruption Loans Scheme

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.