Do you have clients who need to access the Coronavirus Business Interruption Loan Scheme?
We have received confirmation that the Coronavirus Business Interruption Loan Scheme (CBILS) is now available and have outlined the details below:
CBILS supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance facilities. The scheme provides the lender with a government-backed guarantee, potentially enabling a ‘no’ credit decision to become a ‘yes’.
To be eligible for a facility under CBILS, an SME must have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable the business to trade out of any short-to-medium term difficulty.
Scheme Features will include:
- Up to £5m facility
- 80% guarantee: The scheme provides the lender with a government-backed, partial guarantee against the outstanding balance.
- No guarantee fee for SME’s 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 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: At the discretion of the lender, 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.
- The borrower always remains 100% liable for the debt.