Coronavirus Business Interruption Loan Scheme

The government-backed Coronavirus Business Interruption Loan Scheme (CBILS), which has opened for applications, supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance facilities. The scheme can provide facilities of up to £5m for SME businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cashflow.

The government defines an SME as a company that employs fewer than 250 people; and
has annual turnover less than or equal to £39 million, or has a balance sheet total of less than or equal to £33 million. The CBILS scheme is thus most relevant to smaller CHCs who qualify under these criteria.

The CBILS website is the best source of up to date information but for ease of reference the following documents contain all the key details:

1. FAQs for SMEs
2. Eligibility Checker
3. CBILS infographic

CBILS: KEY FEATURES
·         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[1], so smaller businesses will benefit from no upfront costs and lower initial repayments.[2]
·         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.

NEXT STEPS

There is a lot of information available and CHO encourages potentially eligible members to review the attached documents and also visit the website for more details.

Any queries members may have in relation to their business’s specific circumstances must be directed to their lender or one of the accredited CBILS lenders, and not to the British Business Bank.

Please do bear in mind that CHO does not assume any responsibility for any specific member company. Our updates are for information and guidance purposes only. It is the case that each and every member company must always take their own independent advice in respect of the specific circumstances that apply to their company.