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arrow_back How can I apply for a business interruption loan (CBIL)?

in Banking and financing Accounting Expert
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The cashflow of my business is affected by the coronavirus (COVID-19) pandemic and the worsening economic situation. What steps should I take to prepare and apply for the Coronavirus Business Interruption Loan scheme?

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Due to the major economic disruptions caused by the Covid-19 coronavirus pandemic the Government along with many other economic support schemes, has announced that it will be launching the Coronavirus Business Interruption Loan Scheme (CBILS) which will provide financial support to small and medium sized businesses (SMEs). The loan limit under this scheme is set at £5 million, with no interest due for the first 12 months.

 British Business Bank will operate CBILS via its accredited lenders.

Accredited Lenders offering Coronavirus Business Interruption Loans

1pm plc / ABN-AMRO / Adam & Company / Aldermore /  Allied Irish Bank / Arkle Finance Limited / ART Business Loans / Askif / Assetz Capital / Atom Bank / Bank of Ireland / Bank of Scotland / Barclays / BCRS / Business Enterprise Fund / Calverton Finance / Chamber Acorn Fund / Close Brothers / Clydesdale Bank / Compass Business Finance / County Finance Group / Coutts Commercial bank / CWRT / Cynergy Bank / Dankse Bank / DSL Business Finance / Ebury / Enterprise Answers / Finance for Enterprise / First Enterprise / Fleximize / Funding Circle / GC Business Finance / Genesis / Haydock Finance / Hitachi Capital UK / HSBC / Independent Growth Finance / Investec Corporate & Investment Banking / Let’s Do Business / Lloyds Bank / MSIF / Metro Bank / Natwest / Newable / OakNorth / Paragon Bank / Robert Owen / Santander / Secure Trust / Skipton Business Finance / Social Business Investments / SWIG Finance / Starling / The Co-operative Bank / RBS / ThinCats / Tower Leasing / TSB / UKSE / Ulster Bank / Ultimate Finance / White Oak UK 

(list updated 10/05/2020)

 Businesses Eligible for CBILS

  • UK based, with turnover of no more than £45 million per year
  • Have a borrowing proposal which the lender would consider viable, were it not for the COVID-19 pandemic and will be viable in the longer-term

 Businesses NOT Eligible

  • Banks and building societies
  • Insurers and reinsurers (but not insurance brokers)
  • Public-sector organisations, including state-funded primary and secondary schools
  • Employer, professional, religious or political membership organisations
  • Trade unions

 How to apply for a Coronavirus Business Interruption Loan

1.     Find a lender from the Accredited Lenders list (as above)

2.     Businesses must approach the lender themselves (through the lender’s website)

3.     The lender will decide whether they can offer finance based on the scheme or not

4.     If rejected, businesses can approach other lenders in the scheme

 Steps a business should take to prepare for the application

  • Decide what type of finance will be best suitable to the needs of the business, compare lenders by reviewing their websites for information
  • Prepare evidence of business viability: draft a borrowing proposal showing that were it not for the COVID-19 pandemic, the business would be considered viable by the lender
  • Prepare Forecasts, preferably 3 year Profit and Loss, Balance Sheet and Cashflow 
  • Prepare Management Accounts 
  • Prepare a summary of business assets
  • Ensure historic accounts are complete
  • Prepare a business plan
  • Be aware that some banks are charging very high interest rates on these loans (even though they are able to borrow at 0%)

Note: The British Business Bank is advising that the CBIL should only be applied for if every other government relief package has been taken: VAT deferment, Time to Pay for PAYE, NI, Corp Tax, Staff furlough, etc. These measures MUST appear in the CBIL forecast for a heightened chance of approval.

Types of finance available

  • Term loans
  • Overdrafts
  • Asset finance
  • Invoice finance

Note: Not every accredited lender can provide every type of finance

How long the loan is for

The maximum length of the facility depends on the type of finance you apply for and will be:

  • up to 3 years for overdrafts and invoice finance facilities
  • up to 6 years, for loans and asset finance facilities

 Points to note:

  • The scheme went live on Monday 23 March and will initially run for six months
  • The Government announced that the scheme will be based on demand during the months that it runs, i.e. funds are demand-led and will not run out
  • If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so
  • If a business is part of a Group, more than one company within the group can be considered for CBILS but only if the consolidated group turnover does not exceed the £45m annual turnover threshold
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