The Coronavirus Business Interruption Loan Scheme (CBILS) gives businesses access to bank lending, overdrafts and other finance solutions to help them through the COVID-19 crisis.
The scheme provides financial support across the UK to firms that are losing revenue and seeing their cash flow disrupted. It is a part of a wider package of Government support for UK businesses and employees.
Support for SMEs includes invoice finance and asset finance of up to £5 million and for up to 6 years.
How it works – and how smaller businesses can benefit
British Business Bank operates CBILS via its accredited lenders. There are over 40 of these lenders currently working to provide finance, and they include high-street banks, challenger banks, asset-based lenders and smaller specialist local lenders.
A lender can provide up to £5 million in the form of invoice finance, asset finance term loans and overdrafts.
The Government will also 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.
Your 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 COVID-19 pandemic, and believes will enable you to trade out of any short-term to medium-term difficulty.
Government lender guarantee
The Government will provide lenders with a guarantee of 80% on each loan to give lenders further confidence in continuing to provide finance to SMEs. This is subject to pre-lender cap on claims. The borrower always remains 100% liable for the debt.
The scheme, backed by the Government-owned British Business Bank, will be delivered through commercial lenders.
Support for larger firms
Larger companies will have support under the new Covid-19 Corporate Financing Facility, whereby the Bank of England will buy short term debt. It will allow firms to finance short-term liabilities along with the necessary support for those affected by a short-term funding squeeze and ease the supply of credit to all firms.
Non-financial companies that meet the criteria set out on the Bank of England’s website are eligible.