The Coronavirus Business Interruption Loan Scheme (CBILS) is a temporary fiscal measure introduced by HM Government in response to the COVID-19 pandemic and the wider implications on the British economy. The purpose of CBILS is to help provide targeted support to small and medium-sized businesses in the UK. The scheme will be “demand-led” which means the Treasury will fund the scheme accordingly.
The CBILS scheme is managed by the British Business Bank and will be made available to eligible businesses through the BBB’s network of 45 accredited lenders – which predominantly include high street retail banks and specialist business financial service providers. To find out which banks are offering the scheme, visit the British Business Bank for more information.
What Does The CBILS Scheme Include?
There is a finance facility of up to £ 5 million pounds. The maximum value is £5 million, and the longest repayment term is six years. The UK Government will pay interest and fees for the first 12 months of the scheme. This means businesses will benefit from low initial repayments and no “upfront costs and fees”. In relation to security, CBILS are available to smaller businesses even when other lenders won’t lend but CBILS are also available to those businesses who have the minimum security available. Personal guarantees for lending below £250,000 are not allowed but personal guarantees for lending above £250,000 might be required based on the lender’s own unique discretion.
The Small Print Explained
The loan term is up to six years for term-based loans and therein asset finance facilities. However, lending for overdrafts and invoice repayment financing facilities the term will be reduced to three years. There is an 80% guarantee implicit in this scheme whereby the lender (this is the bank you borrow from) who lends funding from the Government scheme. There isn’t a Guarantee fee for small and medium-sized businesses. Like traditional commercial borrowing, the borrower will always remain 100% liable for any and all repayments of the debt in full. This is a Government scheme and as such is generous due to the COVID-19 pandemic, but the loan will need to be repaid.
At Prestige Business Management we can help. Our clients understand we go that extra mile and in the current uncertain times we live in we can help by providing stability and support. Why not get in touch with Prestige Business Management today on 0203 773 2927. Why not call us today to talk about the Coronavirus Business Interruption Scheme and how it could help your business during these troubling times.
