• Text Colour:
  • C
  • C
  • C
  • C
  • Text Size: A A A

Coronavirus Business Interruption Loan Schemes (CBILS)

 

**UPDATED INFO ON 20TH APRIL 2020**

Update on the Coronavirus Business Interruption Loan Schemes, designed to support UK businesses that are losing revenue and seeing their cashflow disrupted as a result of the COVID-19 outbreak has been announced along with details on a New Future Fund to support innovative businesses. 

  1. THE CORONOVIRUS LARGE BUSINESS INTERUPTION LOAN SCHEME (CLBILS)

The Coronavirus Large Business Interruption Loan Scheme (CLBILS) was announced by the Chancellor of the Exchequer on Thursday, 16 April 2020.

The new scheme provides finance to mid-sized and larger UK businesses with turnover above £45m (which is the upper limit for the existing smaller-business focused CBILS).

CLBILS can help provide facilities of up to £25m for businesses with turnover from £45m up to £250m, and facilities of up to £50m for those businesses with a turnover of more than £250m who are suffering disruption to their cashflow due to lost or deferred revenues during the Covid-19 outbreak.

The scheme will be operational with lenders from Monday 20 April 2020.

The CLBILS website is the best source of up to date information but for your ease of reference please see attached the fact sheet for CLBILS .

CBILS SME Factsheet

Scheme features

The Coronavirus Large Business Interruption Loan Scheme supports term loans, revolving credit facilities (including overdrafts), invoice finance and asset finance facilities. It is designed to give lenders greater confidence to provide funding by providing a partial guarantee of 80% of the outstanding facility balance.

  • Up to £50m facilities: up to £50m for those with a turnover of over £250m, and of up to £25m for businesses with turnover from £45m up to £250m.
  • 80% guarantee: The scheme provides the lender with a government-backed, partial guarantee (80%) against the outstanding facility balance.
  • Finance terms: Finance terms are from three months to three years.
  • Economic benefits go to the borrower: Borrowers will benefit from a proportionate reduction in pricing as a result of lenders receiving capital and risk benefits.
  • Personal guarantees: No personal guarantees are permitted for facilities under £250,000. For facilities of £250,000 and over, claims on personal guarantees cannot exceed 20% of losses after all other recoveries have been applied
  • The borrower always remains 100% liable for the debt.

 

CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME EXPANDED TO BENEFIT MORE SMALLER BUSINESSES ACROSS THE UK

  • Personal guarantees cannot be taken for any facilities below £250k
  • Insufficient security no longer a condition to access the scheme
  • Personal guarantees may be required for facilities above £250k but capped at 20% of the outstanding balance after business asset recoveries
  • Lenders to retrospectively apply changes

2 April 2020

Launched on 23 March, today the Coronavirus Business Interruption Loan Scheme (CBILS) has been significantly expanded along with changes to the scheme’s features and eligibility criteria. The changes mean even more smaller businesses across the UK impacted by the Coronavirus crisis can access funding. Importantly, access to the scheme has been opened up to those smaller businesses who would have previously met the requirements for a commercial facility but would not have been eligible for CBILS.

This significantly increases the number of businesses eligible for the scheme. Since CBILS launched less than two weeks ago, almost 1,000 facilities valued at £90.5m have been approved by lenders accredited to the British Business Bank’s CBIL Scheme. More than 80% of the UK’s smaller businesses have a finance relationship with CBILS accredited lenders. The first facility was delivered under the scheme by Yorkshire-based Skipton Business Finance, with other lenders including the Business Enterprise Fund, Newable Business Loans, the Northern Powerhouse Investment Fund, Finance For Enterprise, Danske Bank, Clydesdale Bank and HSBC. The number of providers of the scheme will continue to grow and new alternative finance lenders will continue to be accredited to the scheme creating more choice and diversity of supply for smaller businesses.

New scheme features

  • No personal guarantees for facilities under £250k: Personal guarantees of any form cannot be taken under the scheme for any facilities below £250k.
  • Personal guarantees for facilities above £250k: Personal guarantees may still be required, at a lender’s discretion, but recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied.
  • A Principal Private Residence (PPR) cannot be taken as security to support a personal guarantee or as security for a CBIL backed facility.
  • Security: For all facilities, including those over £250,000, CBILS can now support lending to smaller businesses even where a lender considers there to be sufficient security, making more smaller businesses eligible to receive the business interruption payment.

 

2. NEW FUTURE FUND TO SUPPORT INNOVATIVE UK BUSINESSES

On 20 April 2020 the Chancellor of the Exchequer announced he is to establish a new Future Fund to support the UK’s innovative businesses currently affected by Covid-19. These businesses have been unable to access other government business support programmes, because they are either pre-revenue or pre-profit and typically rely on equity investment. The scheme will deliver an initial commitment of £250m of new government funding which will be unlocked by private investment on a match funded basis.

The government scheme, which will be developed in partnership with the British Business Bank with the intention of launching for applications in May, will initially be open until the end of September. Over the coming weeks the Bank will work with government on the details on how the Future Fund will operate and how to apply for the scheme.

3. MORE DELIVERY PARTNERS ANNOUNCED FOR COROVIRUS BUSINESS LOANS INTERVENTION SCHEME (CBILS) AND UPDATED FAQs

The British Business Bank has recently announced that it has approved five new lenders for accreditation under the Coronavirus Business Interruption Loan Scheme (CBILS):  The Co-operative Bank, Cynergy Bank, OakNorth Bank, Starling Bank and Funding Circle.

In addition Arkle Finance, Close Brothers and Secure Trust Bank, recently accredited under the Enterprise Finance Guarantee, are now accredited under CBILS.  Coutts has been accredited for CBILS as part of RBS Group’s existing accreditation.

View and select a CBILS accredited lender

We have recently revised and updated our CBILS FAQs for SMEs with a number of the more complex questions that SMEs have been asking Lenders.

These are the new questions we have added to the FAQs page on our BBB website:

 

OTHER BUSINESS FINANCE SUPPORT OPTIONS

You can also find details of other government measures to support public services, people and businesses through this disruption on the Government’s Business Support website.

GUIDANCE AND SUPPORT FOR YOUR BUSINESS DURING THIS PERIOD OF UNCERTAINTY

The British Business Bank and The Institute of Chartered Accountants in England and Wales (ICAEW) have created new content to help businesses that are facing financial and operational challenges as a result of the coronavirus outbreak.

You can view this regularly updated guidance at the Business Finance Guide website.

To read more click here