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Are you eligible for the Coronavirus Business Interruptions Loan Scheme?

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The Coronavirus Business Interruption Loan Scheme (CBILS) opens for applications today. The programme aims to provide facilities of up to £5m for smaller businesses across the UK who are experiencing lost or deferred revenues and disruptions to their cash flow due to coronavirus.

Delivered by the British Business Bank, CBILS will support the continued provision of finance to the UK’s smaller businesses during the COVID-19 outbreak. Although the Budget announced that an initial £1.2bn of government-backed lending would be available through the new scheme, the government has since said it will be demand-led and be resourced accordingly.

The news broke as Prime Minister Boris Johnson ordered the closure of all “pubs, clubs bars and restaurants” leaving many hospitality sector business owners and staff uncertain about their future.

Keith Morgan, Chief Executive of British Business Bank, said “in this period of exceptional hardship for smaller businesses across the UK, it has been vitally important to get this new scheme up and running as soon as possible. Available from today, we hope this new scheme will enable lenders to provide the finance smaller UK businesses need, alongside other government measures, to help them survive the current economic disruption.”

What is the scheme?

The Coronavirus Business Interruption Loan Scheme supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance facilities.

The scheme provides the lender with:

Up to a £5m facility: The maximum value of a facility provided under the scheme will be £5m, available on repayment terms of up to six years.

An 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: This means no fees for smaller businesses. However, lenders will pay a fee to access the scheme.

Interest and fees paid by the 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 so smaller businesses will benefit from no upfront costs and lower initial repayments.

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: 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.

Are you eligible?

Smaller businesses from all sectors can apply for the full amount of the facility. To be eligible for a facility under CBILS, an SME must be UK based in its business activity, with a turnover of no more than £45m per year. In addition, they must have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender.

How to apply

CBILS is available through the British Business Bank’s 40+ accredited lenders and partners, which are listed on the British Business Bank website.

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