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iwoca commits to £200m loans to small businesses before CBILS ends
Michelle Monck

Michelle Monck

Consumer Finance Expert
Published: 13/11/2020

iwoca has announced its intent to lend a total of £200m to small businesses under the Coronavirus Business Interruption Loans Scheme (CBILS) before it ends in January 2021. The lender that describes itself as one of Europe’s largest lenders to small businesses has already lent £100m under the scheme and is now set to double this in the next few months.


Small businesses that have had their trading disrupted due to the Coronavirus pandemic and that need a business loan of between £50,000 and £5m can apply to lenders for a CBILS loan. We have reported previously about the difficulties some businesses had in finding lenders to accept their CBILS applications. Many lenders focused initially on servicing their existing clients, however in July iwoca opened-up their CBILS loans up to new customers as well. This month, iwoca has had 83% of CBILS approved applications from new customers and the lender now accounts for 5.6% of all approvals under the scheme. The national average approval rate has been around 50% since the scheme launched in the Spring.


To be eligible for a CBILS loan, businesses need to have been a viable business trading for at least three years prior to the pandemic and have a turnover of at least £100,000 with a salary bill of more than £12,500. Find out more about how CBILS works.


Businesses that don’t need a lump sum can use invoice finance to boost their cashflow. During times of recession businesses can find that it takes longer for their invoices to be paid, crippling their cashflow. Invoice finance allows businesses to be paid immediately on the issuance of invoices, Iwoca offer invoice finance called IwocaPay this pays businesses an agreed value for their invoices and still lets its customers receive their usual credit terms. It also pays 100% of the invoice value and has removed fees for this service. The lender has reported an 85% spike in those businesses using this service.


CBILS now has more than 100 accredited lenders and those offering invoice finance include Ultimate Finance, Aldermore, Close Brothers, HSBC UK and Investec.


Compare invoice finance providers and find out more about how invoice finance works.
Those wanting a CBILS loan from Iowca can apply for sums between £50,000 up to £750,000 and contact the lender directly or speak to a specialist business loans broker.

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The best business savings accounts

Business savings accounts are good options for businesses that have extra funds that are not currently needed. Businesses who know that the money will not be needed for a long period of time, would likely be better choosing a five year business bond to get the best possible rates. Businesses able to lock their money away for a short period of time will find the best rates are available in the one year fixed business bond charts. Meanwhile, businesses that think they will need access to their funds would probably be best considering an easy access business account.

Here we’ve highlighted the best rates available in the five year, one year and easy access business charts. Savers should be aware that although correct at the time of publishing, saving rates can change at any time.

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The Coronavirus Business Interruption Loans Scheme (CBILS) is extended

The Chancellor has recently announced the extension of CBILS to end January 2021. The scheme that offers business loans, invoice finance, asset finance and business overdrafts is open to businesses that need finance due to Covid-19 affecting their trade.


Up to 18 October over 73,000 businesses had received more than £17 billion from CBILS and a further £1.3 million had received £40bn from Bounce Back Loans. In addition, 632 larger firms also received £4.57 billion under the overall scheme.


Businesses can either qualify for a Bounce Back Loan or CBILS loan, with CBILS split between SMEs and larger firms. Bounce Back loans are for small businesses that may be struggling to access support under other Coronavirus support schemes, such as the Furlough scheme or Self Employed Support Scheme. This allows businesses to borrow from £2,000 up to 25% of your turnover to a maximum of £50,000 at a fixed interest rate of 2.5%.


The Chancellor has also announced some additions to the scheme called Pay as you Grow. This includes payment holidays and/or interest-only payments of up to six-months. Businesses will be allowed to use a payment holiday once during the loan and will have need to have made at least six payments for requesting one. In addition, those businesses that have already received a Bounce Back Loan can now also extend this up to the full £50,000 if they meet the lender’s criteria.


CBILS for SMEs offers business loans of £50,000 up to £5 million. Interest rates are set by the lender and are dependent on how they view the risk of the loan. To be eligible for a loan under CBILS businesses need to have a minimum turnover of £100,000 and a salary bill of £12,500 or more.


Both loan schemes provide 12-months interest free, with no payments to make and the loans can last up to ten years.


There is more information in our guide about eligibility and how to apply for CBILS or businesses can contact our preferred business broker for advice about their case.

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What financial help is available for the self-employed and freelancers during November lockdown?

More financial help has been made available during the November lockdown for those who are self-employed, but freelancers have not been included in the new support scheme.

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A review of invoice finance lenders 2020

Cashflow has always been the lifeblood of any business, but in 2020 this has never been more important due to the impact of Coronavirus on the UK economy and the consistency of trade for businesses.


Invoice finance can help businesses to manage their cashflow by accelerating the speed of receiving funds for their outstanding invoices. This works by a lender agreeing to release to the business a percentage of the value of invoices when they are issued, instead of the business waiting for their customer to pay them. Depending on the type of invoice, either the business or the lender will be responsible for chasing up payment of the invoices. The lender may charge a service fee and interest costs on the amount released to the business. Businesses need to offer trade business-to-business on credit terms to qualify for invoice finance and some lenders have rules on the minimum turnover they will accept.

We review what is available from some of the leading invoice finance lenders in the UK.

 

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Recent News

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More time to apply for a Coronavirus Business Interruption Loan as date extended

24th September 2020

Rishi Sunak, the Chancellor has announced that the deadline to apply for a Coronavirus Business Interruption Loan and a Bounce Back Loan has been extended to the end of November. The series of measures to support businesses during the winter months and then beyond has been called ‘pay as your grow’.

Rishi Sunak, the Chancellor has announced that the deadline to apply for a Coronavirus Business Interruption Loan and a Bounce Back Loan has been extended to th

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How to get an interest free business loan before CBILS ends

22nd September 2020

The Coronavirus Business Interruption Loans Scheme (CBILS) closes to applications at the end of this month. Businesses have just days left to apply for business loans, invoice finance, asset finance and overdrafts that offer 12-months interest free and payment holidays.

The Coronavirus Business Interruption Loans Scheme (CBILS) closes to applications at the end of this month. Businesses have just days left to apply for business

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Last six weeks for business interruption loans

14th August 2020

The Coronavirus Business Interruption Loan Scheme (CBILS) comes to an end on 31 September 2020. After this date, businesses affected by the Coronavirus pandemic will no longer be able to access these loans.

The Coronavirus Business Interruption Loan Scheme (CBILS) comes to an end on 31 September 2020. After this date, businesses affected by the Coronavirus pandemic

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SMEs pushing through loans ahead of the CBILS deadline

28th July 2020

SMEs looking for loans of more than £50,000 under the Coronavirus Business Interruption Loans Scheme (CBILS) are now pushing through applications to make sure they can secure their finance before the scheme ends in September.

SMEs looking for loans of more than £50,000 under the Coronavirus Business Interruption Loans Scheme (CBILS) are now pushing through applications to make sure t

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