Coronavirus Business Interruption Loan Scheme

At Budget 2020 on Wednesday 11 March, the Chancellor announced a ‘Coronavirus Business Interruption Loan Scheme’ (CBILS), and that it would become available ‘over the coming weeks’.

This has been brought forward, and we now expect the new scheme to become available in week commencing 23 March 2020.

This information is with thanks to the British Business Bank website.

Coronavirus Business Interruption Loan Scheme

As well as loans, there are many other types of finance supported by the programme, depending on the provider. You can find out what type of finance they provide on our partner page.

It will be provided by the British Business Bank through participating providers. It will offer more attractive terms for both businesses applying for new facilities and lenders, with the aim of supporting the continued provision of finance to UK businesses during the Covid-19 outbreak.

The scheme provides the lender with a government-backed guarantee against the outstanding facility balance, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’. NB – the borrower always remains 100% liable for the debt.

The Government will also cover the first 6 months of interest payments, so businesses will benefit from lower initial repayments. The business remains liable for repayments of the capital. The maximum value of a facility provided under the scheme will be £5 million pounds (the original announcement suggested a maximum value of £1.2 million.)

CBILS Supports a Wide Range of Business Finance Products, including:

  • Term facilities
  • Overdrafts
  • Invoice finance facilities
  • Asset finance facilities

To be Eligible for Support via CBILS, your Business must:

  • Be UK based, with turnover of no more than £41 million per annum
  • Operate within an eligible industrial sector (a small number of industrial sectors are not eligible for support – see below)
  • Be able to confirm that they have not received de minimis State aid beyond €200,000 equivalent over the current and previous two fiscal years
  • Have a sound borrowing proposal, but insufficient security to meet the lender’s requirements
  • Full eligibility criteria will be published shortly

Finance terms are from three months up to ten years for term loans and asset finance and up to three years for revolving facilities and invoice finance.

To apply for an CBILS-backed facility, businesses may wish to consider approaching one or more participating lenders to discuss their borrowing needs.

Eligibility restrictions

Please note that a limited number of further eligibility restrictions apply to the Coronavirus Business Interruption Loan Scheme. Full details can be found here.

Almost all business sectors are eligible. However there are a small number of excluded/restricted sectors arising primarily from EU de minimis-State aid rules. 

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