Coronavirus Business Interruption Loan Scheme (CBILS)

Details regarding the scheme offered by British Business Bank in response to COVID-19.

Coronavirus Business Interruption Loan Scheme

April 14th, 2020

The Coronavirus Business Interruption Loan Scheme (CBILS) is part of a larger governmental support package designed to help small businesses who have been affected by the spread of COVID-19 (Coronavirus). This particular loan scheme is being offered by the British Business Bank to provide financial aid to SMEs that are losing revenue because of COVID-19.

What is the Coronavirus Business Interruption Loan Scheme (CBILS)?

CBILS is a temporary guarantee scheme for lenders, provided by the British Business Bank. It is designed to encourage lenders to continue providing small businesses (or SMEs) with access to business financing by offering lenders a government-backed guarantee on each loan. The scheme currently includes over 40 accredited lenders, including:

  • High-street banks.
  • Challenger banks.
  • Asset-based lenders.
  • Smaller, specialist local lenders.

In order to encourage more lending, the UK government will also provide lenders with a guarantee of up to 80% on each loan and will provide small businesses with a Business Interruption Payment to cover the first 12 months of interest payments and lender-levied fees. The government will also pay any lender-levied fees, however, borrowers will still need to make capital repayments during the 12-month repayment holiday.

What does CBILS entail?

CBILS will run from March 23, 2020, for the next 6 months and entails access to loans, overdrafts, invoice finance, and asset finance of up to £5 million and for a term of up to 6 years.

Who can apply for CBILS?

Any UK-based business with a turnover of less than £45 million per year can apply for CBILS. However, as applications must be made to individual lenders, applicants will need a borrowing proposal which the lender would consider to be viable were it not for COVID-19 and which the lender believes would allow the applicant to trade out of any short-term to medium-term difficulty.

UK-based businesses from any sector are eligible, except for:

  • Banks and building societies.
  • Insurers and reinsurers (excluding insurance brokers).
  • Public sector organizations, including state-funded primary and secondary schools.
  • Employer, professional, religious, or political membership organizations.
  • Trade unions.

A "business" includes sole traders, freelancers, body corporates, limited partnerships, limited liability partnerships, and other legal entities that operate through a business account.

Businesses who have received any previous de minimus state aid or other forms of COVID-19-related aid will still be eligible to apply for CBILS. Also, fishery, aquaculture, and agriculture businesses may not be eligible for the government's full interest and fee payment.

How to apply for CBILS:

1. Choose a lender.

CBILS is backed by the British Business Bank and is only available through its accredited lenders. Currently, there are just over 40 accredited lenders that can be applied through. You can visit British Business Bank's website to view and filter their list of accredited lenders by financial variant and by region.

Use the filters provided as not every lender will offer every type of finance listed by CBILS.

List of Accredited Lenders:

ABN-AMRO Commercial Finance

Arkle Finance Limited

ART Business Loans

Askif Inclusive Finance

Bank of Ireland

Bank of Scotland

Barclays

BCRS Business Loans

Business Enterprise Fund

Chamber Acorn Fund

Clydesdale and Yorkshire Banks

Compass Business Finance

CWRT

Danske Bank

DSL Business Finance

Enterprise Answers

Finance for Enterprise

First Enterprise

GC Business Finance

Genesis

Haydock Finance

Hitachi Capital (UK) PLC

HSBC

Let'sDoBusiness Group

Lloyd's Bank

Merseyside Special Investment Fund

Metro Bank

NatWest

Newable

Robert Owen Community Banking

Santander

Skipton Business Finance

SWIG Finance

The Royal Bank of Scotland

TSB

UKSE

Ulster Bank

ICAEW

ICAS

Responsible Finance

NACFB

UK Finance

ACCA

2. Approach the lender.

As there is a high demand for CBILS, it is best to approach the lender yourself through the lender's website. The phone lines will likely be busy and you will probably not be able to go to the branch due to social distancing.

Check the lender's eligibility requirements and make sure you have all the appropriate documentation.

3. Wait for the lender's decision.

Each individual lender has the authority to decide whether or not to offer finance through the scheme. They may also decide to offer you financial aid through normal commercial terms without making use of the scheme at all.

If you are applying through one of the Big Four banks, be aware that they will not take personal guarantees as security for loans of less than £250,000 and these loans will be given as unsecured loans.

If the lender you have chosen turns you down, you may approach one of the other accredited lenders within the scheme.

Further guidance and support:

The British Business Bank and The Institute of Chartered Accountants in England and Wales also offer resources to help small businesses with financial difficulties. Take a look at their regularly updated Business Finance Guide.

FAQs:

What is the Coronavirus Business Interruption Loan Scheme?

The Coronavirus Business Interruption Loan Scheme (CBILS) is a temporary guarantee scheme for lenders, provided by the British Business Bank. It is designed to encourage lenders to continue providing small businesses with access to business financing.

What kind of financing can I apply for through the Coronavirus Business Interruption Loan Scheme?

CBILS offers access to loans, overdrafts, invoice finance, and asset finance of up to £5 million for up to 6 years.

How do I apply for the Coronavirus Business Interruption Loan Scheme?

  1. Choose a lender.
  2. Approach the lender.
  3. Wait for the lender's decision.

Who can apply for the Coronavirus Business Interruption Loan Scheme?

Any UK-based business with a turnover of less than £45 million per year can apply for CBILS. Applicants will need a borrowing proposal which the lender would consider to be viable were it not for COVID-19 and which the lender believes would allow the applicant to trade out of any short-term to medium-term difficulty.