Coronavirus Business Interruption Loan Scheme (CBILS)


The Coronavirus Business Interruption Loan Scheme (CBILS), delivered through British Business Bank accredited lenders and partners, is designed to support the continued provision of finance to UK smaller businesses (SMEs) during the Covid-19 outbreak. The scheme enables lenders to provide facilities of up to £5m to smaller businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cashflow.

It supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance facilities. Please note that for term loans and overdrafts, the minimum amount a lender can offer under CBILS is £50,001.

Scheme Features

Key scheme features:

  • Up to £5m facility: The maximum value of a facility provided under the scheme is £5m, available on repayment terms of up to six years.
  • No guarantee fee for SMEs to access the scheme: No fee for smaller businesses.
  • 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.
  • Guarantee to the lender: The scheme provides the lender with a government-backed, guarantee against the outstanding facility balance. The borrower always remains 100% liable for the debt.
  • Principal Private Residence (PPR) – A borrowers/guarantors PPR cannot be taken as security to support a Personal Guarantee or as security for a CBILS- backed facility.
  • The borrower always remains 100% liable for the debt.

Additional notes on security:

  • 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.

 

Eligibility Criteria

Smaller businesses from all sectors can apply for the full amount of the facility. To be eligible for a facility under CBILS, a smaller business must:

  • Be UK based in its business activity, with turnover of no more than £45m per year.
  • Have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender
  • Self-certify that it has been adversely impacted by the Coronavirus

Please note: The following are not eligible under CBILS:

  • Banks, Insurers and Reinsurers (but not insurance brokers);
  • public sector bodies and;
  • state funded primary and secondary schools.

 

Legal Notice

The Coronavirus Business Interruption Loan Scheme (CBILS) is managed by the British Business Bank on behalf of, and with the financial backing of the Secretary of State for Business, Energy and industrial Strategy (BEIS). British Business Bank plc is wholly owned by HM Government and is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). Full details on CBILS and the list of participating CBILS lenders can be found on the British Business Bank website at: www.british-business-bank.co.uk/CBILS

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