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.

Eligibility

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.