The Government is supporting businesses and their employees through a package of measures during this period of unprecedented disruption. We provide here details on The Coronavirus Business Interruption Loan Scheme (CBILS). You can access further support and advice on how to protect your business and employees here.


What is CBILS?

CBILS is a new scheme, announced by The Chancellor that can provide facilities of up to £5m for smaller businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cashflow.


Key Details

The scheme covers a range of business funding solutions, including term loans, invoice finance, overdrafts and asset finance facilities. It provides the lender with a government-backed guarantee, which means that a credit decision from a lender could change from 'no' to 'yes'.  Key characteristics of the scheme are:

  • Loans of up to £5m: The maximum value of a facility provided to you under the scheme will be £5m, to be repaid over a period of up to six years.
     
  • 80% guarantee: The scheme provides the lender with a government-backed, partial guarantee against the outstanding balance of your loan.
     
  • The government will cover the first 12 months of interest payments, and any lender-related fees, which means no up-front costs and lower initial repayments for your business.
     
  • Finance terms: Up to six years for term loans and asset finance facilities, and three years for overdrafts and invoice finance facilities.
     
  • Security: At your lender's discretion, the scheme may be used for unsecured lending for facilities of up to £250,000. For loans above this amount, the lender must establish a lack or absence of security prior to businesses using CBILS. If the lender can offer you finance on normal commercial terms without the need to make use of the scheme, they will.
     
  • You will remain 100% liable for the debt. 

How do I apply? 

You can see a list of participating lenders here. You can apply directly to any of the participating lenders. Please note that accredited banks and lenders are experiencing a high volume of customer enquiries.   

What if my bank isn’t part of the scheme? 
If your bank cannot extend your existing finance, or is not part of the scheme, Funding Xchange can help you establish options from a range of other lenders. We are adding new lenders to the platform on a regular basis so do check back to keep your options up to date.



Will I have to use my home as collateral to secure the debt? 

No, the government has said that no one needs to put up their home as security to benefit from the scheme.

Is CBILS available to new businesses? 

Yes, but you could also consider other sources of finance such as Start Up Loans, where you can still apply for a startup loan of up to £25,000, while second loans remain available to eligible existing customers. They have a dedicated support section on their website.

Will all small and medium-sized firms be able to borrow money? 

Not necessarily. You will have to prove that you have a viable business, which been trading successfully before the crisis, but just need extra support to deal with short term difficulties caused by the current disruption. 

Can self-employed people apply? 

Yes, if you're self-employed and have an annual turnover of up to £45m, operate using a business bank account, and generate more than 50% of your revenue from trading activity. It doesn't matter whether you're a sole trader, freelancer or a limited partnership. 

The government has also rolled out a package of support for the self-employed as part of its Self-employment Income Support Scheme.

 

Other support for your business 

CBILS is part of a range of emergency measures which includes deferred VAT payments and salary grants of up to 80%. 

Even if you cannot access CBILS funding, you may still be able to access finance. Funding Xchange helps you get offers from over 40 lenders, some are also accredited as part of CBILS.

Take a look at our detailed funding guide if you are looking for more general help on how to apply for funding, including:

  • Our top tips to make your business fundable
  • How to choose the right funding for your business -- whether you’re a start-up, growth or established business

If you need wider information on how to protect your company, including your people, please see the government COVID-19 for busines website, or our dedicated guide

We've also teamed up with Experian to record a business resilience podcast, and on Monday next week we're joining Enterprise Nation for a free lunchtime webinar on how to access loans at this challenging time.