How to Approach your Bank for a Coronavirus Business Interruption Loan (CBILS)

We have put together the following guidance on how to approach your Bank for a Coronavirus Business Interruption Loan.  Every business and every bank is different and the larger the loan relative to the size of the business, the more detail you are likely to have to provide.

Key Web sites

British Business Bank – CBILS for Businessess and Advisors
Gov UK site : Covid 19 Support for Business
HM Govt Business Support

The Banks all have their own web pages – refer to you own Banks web site

General Guidence

  1. Check that your business is eligible for the CBILS support
  2. Check for any Lender specific requirements and exclusions, generally the High Street are operating similar schemes but other Lenders participating in the scheme may operate differently
  3. Approach your own Bank in the first instance. Lenders are likely to prioritise existing customers over new customers.

Check List – Prepare the following

  • Last two sets of accounts filed (unabbreviated)
  • Latest management information (Until end February 2020) including profit & loss and balance sheet if availableAccounts must show the business is viable pre Covid-19 and post crisis the business can repay the new loan and any existing debt (on the basis of the last actual trading figures)
  • Aged debtors and creditors as of end February 2020 – comment on any items beyond normal terms
  • Details of your personal assets, liabilities, income and expenditure
  • Details of any Time to Pay arrangements with HMRC and/or a snapshot of your HMRC status for PAYE, VAT and corporation tax
  • What, if any, security is being offered
  • An impact statement of how Covid-19 is affecting the business i.e. is the business closed? What wages need paying? Details of ongoing expenses
  • What other options have been explored? e.g. furlough, rate relief, time to pay arrangements etc
  • When the pandemic is resolved, how long do you believe it will take to start recovery? What challenges will you face e.g. future loss of contracts/staff availability, supply chain issues, seasonality, your view on the future for your business.
  • What changes is the business making in the short to medium term to help drive business performance back to either pre virus levels or beyond?
  • Cash Flow Forecast – see notes belowThe Bank requires a cashflow to support/demonstrate the level of loan required – neither insufficient to meet actual need or overly large to be left with cash surplus
    • Start with the opening balance in your books
    • Be realistic about any income you anticipate receiving – speak to key Debtors.
    • The bank will expect to see the business taking advantage of all the support that is available and reflected in the forecast e.g. Job Retention Scheme, VAT deferment, any grants etc. see links above.
    • Any costs / expenses that can be reduced or cut should be. The Bank will expect to see all steps being made reduce the amount of the loan, use of any cash reserves, reduced Directors salaries and potentially introduction of personal funds. Note all the steps taken.
    • Note any payments which are deferred beyond the period of the cash flow as these will need to be incorporated into future forecasts.

We currently understand the amount of a CBILS facility should not exceed:-
twice the annual wage bill of the company for 2019, or for the last year available
or
25% of total turnover of the beneficiary in 2019, whichever is greater.

The above is designed as a guide to help you in your application, however please get in touch with us if you would like help in presenting this information to the Bank or further information.

You can make some quick cash by switching your bank account to one with a bonus. Some banks are giving away £150 for moving your custom, while others offer cashback or high interest. Of course it’s worth checking you won’t lose out in other ways such as high overdraft fees. If you’re likely to go into the red you might be better off switching to a bank with lower fees or even a small interest .