Category: Confidential Invoice Discounting

Coronavirus Business Interruption Loan Scheme (CBILS) – Extended

What Is CBILS?

On 17th December 202, the Government has announced that the Coronavirus Business Interruption Loan Scheme (CBILS) will be extended until 31 March 2021.

The scheme was set up by the Government in conjunction with the British Business Bank and is supported by High Street Lenders, Specialist Lenders, Asset Lenders and Challenger Banks. There are currently over 100 hundred accredited lenders approved to offer CBILS. All loans are Government backed and guaranteed up to 80% of the facility value to encourage more lending.

CBILS provides financial support to UK businesses that are experiencing cash flow disruption or are loosing income as a result of the COVID-19 outbreak.

Since it’s launch during Lockdown 1.0. CBILS has been expanded with significant changes to the scheme’s eligibility criteria and features. As a result even more business impacted by coronavirus and those that didn’t previously qualify can access the funding they require.

Key Features

  • £5m Loan Facility: The maximum value of a facility provided under the scheme will be up to £5m.
  • Finance Terms: For Term Loans and Asset Finance Facilities are 6 years. With Overdrafts and Invoice Finance Facilities the finance terms is 3 years.
  • Personal Guarantees: Are not required for facilities under £250,000 and are at lender discretion above this amount. A PG will exclude principle private residence and will be capped at 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied. Insufficient security is no longer a condition to access CBILS.
  • 80% Guarantee: The government provides the lender with a partial guarantee of 80% against the outstanding facility balance. The borrower remains 100% liable for the debt.
  • No Guarantee Fees For Business: There are no guarantee fees for SMEs. Lenders 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 charges.
  • Not Limited To One Application: The scheme allows you to make multiple CBILS applications subject to meeting lender underwriting criteria and responsible lending requirements. Therefore it is possible to apply for a Term Loan and separately Asset Finance or any other combination.


To be eligible for a CBILS facility…

  • The business must be UK based in its business activity.
  • Have an annual turnover of no more than £45 million.
  • Have a borrowing proposal which the lender would consider viable, were it not for the current pandemic.
  • Self-certify that it has been adversely impacted by the coronavirus.

CBILS Deals We’ve Placed For Clients

  1. Haulage Company – Invoice Finance Facility with a Term Loan added to support cash flow and growth.
  2. Construction Company – Multiple Asset Fiance Facilities to purchase plant and equipment.
  3. Manufacturing Company – Term Loan to consolidate existing high interest unsecured business loans.
  4. Recruitment Company – Overdraft and Invoice Finance Facility to smooth out cash flow peaks and troughs.

For an informal discussion in confidence call Orchard Business Finance on 01257 543013.

Case Study – Confidential Invoice Discounting – Food Manufacturer

Established specialist food manufacturing company that had recently won several new contracts with multiple retailers. Approached Orchard Business Finance for advice on how to take pressure off their cash flow and smooth out monthly peaks and troughs.

The company turnover stood at around £6 million and staffing levels fluctuated between twenty and forty staff dependent on the season. Although the company had no financial problems there was borrowing in the form of Unsecured Business Loans and Asset Finance. As a result, lenders approached direct by the Directors weren’t prepared to offer any further funding facilities.

We sat down with the Directors and talked through all aspects of their business and the pressures being experienced along with future growth plans and their requirements to grow the business. It became apparent very quickly that the cash flow problems were being caused. As the result of average customer contracted payment terms being 77 days; purchase ledger showing average payments being made on 98 days; and three crunch payment dates during the month with the first being lenders payments, the second supplier payments and finally payroll.

The Directors recognised that average payments of 98 days were the main cause of the cash flow peaks and troughs. Most importantly and despite the company being financially stable and having good contracts the Directors realised that they were financially vulnerable if they couldn’t smooth out the peaks and troughs.

As a solution we suggested Confidential Invoice Discounting as this would enable the Directors to drawdown up to 85% of the invoice value within 24 hours of it being issued. There was a level of reluctance initially as the Directors considered CID to be an expensive form of Invoice Finance. Once we explained how a CID facility operates and that it only becomes expensive if it’s used irresponsibly the Directors decided to proceed.

One of our trusted lenders offered this food manufacturing company a Confidential Invoice Discounting facility that allowed them to drawdown up to 85% of the invoice value and agreed a facility of £500,000 which also included payment protection and Director personal guarantees that were restricted.

Following a review with the Directors they are happy with the facility as they can now manage monthly supplier, finance and payroll payments with confidence. Additionally, they have been able to confidently approach other retailers and expand distribution of their product.

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