What is CBILS? And are you eligible?
Coronavirus Business Interruption Loan Scheme, (CBILS), is a new scheme for SME’s across the UK that are facing lost revenues, leading to disruptions to their cash flow. CBILS supports a variety of business finance products, including Unsecured business loans, Invoice Finance and Asset Finance.
How it works
The scheme can provide facilities of up to £5m. The scheme provides the lender with a government-backed guarantee, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’. The scheme is open to all sectors. CBILS is available through the British Business Bank’s panel of accredited lenders, many of whom are associated with Griffiths Commercial Finance.
Am I eligible?
1. The facility must be for business purposes 2. The business must be a UK-based SME with annual turnover of no more than £45,000,000 3. The business must generate more than 50% of its turnover from trading activity 4. Any CBILS-backed facility must be used to support primarily trading in the UK 5. Maximum facility size is < £5,000,000
Key Features of CBILS
1. CBILS guarantees facilities up to a maximum of £5m available on repayment terms up to six years for term loans and asset finance, for overdrafts and invoice finance facilities, terms will be up to three years. 2. The scheme provides the lender with a government backed partial (80%) guarantee against the outstanding facility balance. 3. There is no guarantee fee for SMEs to access the scheme. Lenders will pay a fee to access the scheme. The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees. The SME will therefore benefit from no upfront costs and lower initial repayments.
4. 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 scheme requires the lender to establish a lack or absence of security prior to businesses using CBILS. Primary Residential Property (PPR) cannot be taken as security under the scheme.
5. If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so. 6. SME remains 100% liable for the debt.
What Next?
If you believe you qualify for the scheme, or would like to discuss it further, then drop me an email on robert.griffiths@griffithscf.co.uk, and I will be happy to assess your case!