Applying for a Coronavirus Business Interruption Loan | moneyfacts.co.uk

Michelle Monck

Michelle Monck

Consumer Finance Expert
Published: 23/03/2020

STOP PRESS: New rules announced for CBILS

The British Business Bank has announced changes to the Coronavirus Business Interruption Loans Scheme. These changes could see previously rejected businesses now being eligible for the scheme.

Read more in our story How has the Coronavirus Business Interruption Loans Scheme changed?

CBILS is launched

The Coronavirus Business Interruption Loans Scheme (CBILS) is available from today. The scheme launches with 40 lenders and offers loans, asset finance, invoice finance and overdrafts.
CBILS is a new initiative launched by the government and coordinated by the government owned British Business Bank. It is a lending scheme for small and medium sized businesses who are experiencing disruption due to the Coronavirus pandemic. Loans of up to £5m for a maximum term of six years are available to help businesses struggling with their cashflow. Businesses looking for shorter term finance can also access overdrafts and invoice finance for a maximum of three years through CBILS.

How does CBILS work?

CBILS is managed by the British Business Bank, but the lending including the processing of the applications and issuing of funds is through the 40 lenders that are currently part of the scheme.
Businesses with a turnover of less than £45m and that are viable in conditions outside of the Coronavirus pandemic are eligible for the new business loan scheme. Plus, the government provides a guarantee on 80% of all money lent through the scheme, encouraging lenders to accept those loans that might otherwise be considered marginal and be declined. The lender will pay a fee to access the 80% guarantee and this is not charged to the business apply for a loan.
Businesses that need to use CBILS will also receive a 12-month interest free holiday, with the government paying their interest charges and any associated fees from the lender.
Loans of up to £250,000 may be unsecured at the discretion of the lender and any borrowing over this amount will require the lender to evidence no security is available before using CBILS. Business owners cannot use their primary residential property as security.
Businesses should be clear that they are liable for the entire debt and the repayments.
Any application for CBILS should be made directly with one of the lenders participating in the scheme and not the British Business Bank. The demand for these loans is likely to be high, so the British Business Bank has asked businesses to apply with lender’s online rather than going to a branch or calling.

Which businesses are eligible for CBILS?

UK businesses that have a turnover of less than £45m and generate more than half of their turnover from trading may be eligible for CBILS. Businesses who want to use CBILs will need to be viable were it not for the current pandemic and the loan must be used for primarily UK based trading/activity.

Lenders have issued more information abut the criteria to be accepted for CIBLs. Find out if CBILS could help your business.

Is there a fee to use CBILS?

Lenders may charge SMEs an application fee or have early repayment charges on their lending products used under CBILS. The government will cover the cost of these fees in the first twelve months of the loan. Some lenders have indicated they will not charge fees for CBILS loans. Businesses should ask their lender what fees apply.

Are there any exclusions?

Fishing, aquaculture and agriculture businesses may not qualify for the full interest free and fee levy in the first twelve months. Banks, building societies, insurers and reinsurers, the public sector, state funded schools, trade unions and professional or employer based, religious and political membership organisations are excluded.

Which lenders are in the scheme?

Loans

• ABN-AMRO Commercial Finance
• ART Business Loans
• Askif Inclusive Finance
• Bank of Ireland UK
• Bank of Scotland
• Barclays
• BCRS Business Loans
• Business Enterprise Fund
• Calverton finance
• Chamber Acorn Fund (Humber)
• Clydesdale and Yorkshire Bank Group
• Compass Business Finance
• County Finance Group Limited
• CWRT
• Danske Bank
• DSL Business Finance
• Enterprise Answers
• Finance for Enterprise
• First Enterprise
• Business Finance
• Hitachi Capital (UK) PLC
• HSBC
• Let’s Do Business Group
• Lloyds Bank
• Msif
• Metro Bank
• NatWest
• Newable
• Robert Owen Community Banking
• Santander
• Secure Trust Bank Commercial Finance
• Swig Finance
• Royal Bank of Scotland
• Ukse
• Ulster Bank

Invoice Finance

• ABN-AMRO Commercial Finance
• Calverton Finance
• Secure Trust Bank Commercial Finance
• Skipton Business Finance

Asset Finance

• arkle finance limited
• Compass Business Finance
• County Finance Group
• Genesis asset finance
• Haydock Finance
• Hitachi Capital (UK) Ltd

Overdrafts

• Bank of Ireland UK
• Dankse Bank

• Santander Bank

 

TSB is also listed as part of the scheme, but it is not shown on a specific product list on the British Business Bank website.

Disclaimer

Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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