The Coronavirus Business Interruption Loan Scheme (CBILS) is a new scheme announced by The Chancellor at the Budget 2020 – it supports a wide range of business finance products including term loans, overdrafts, invoice financing and asset finance.
Key features of the scheme include
- Up to £5m facility: The maximum value of a facility provided under the scheme will be £5m, available on repayment terms of up to six years.
- 80% guarantee: The scheme provides the lender with a government-backed, partial guarantee (80%) against the outstanding facility balance, subject to an overall cap per lender
- No guarantee fee for SMEs to access the scheme: No fee for smaller businesses. Lenders will pay a fee to access the scheme.
- Interest and fees paid by Government for 12 months: The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments.
- Finance terms: Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.
- Security: At the discretion of the lender, the scheme may be used for unsecured lending for facilities of £250,000 and under. For facilities above £250,000, the lender must establish a lack or absence of security prior to businesses using CBILS. If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.
- The borrower always remains 100% liable for the debt.
There are some criteria and eligibility criteria that the British Business Bank have issued these are
- Be UK-based in its business activity, with an annual turnover of no more than £45m
- Have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable the business to trade out of any short-to-medium term difficulty.
- Please note: If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.
We work with several lenders that are part of this scheme, as well as a whole range of other lenders. Lenders are still open for business and J&J Commercial Finance can help you apply to the right lenders to support your business and help with cash flow.