By Phil Ellerby

As we continue to help business make sense of support available from the government in relation to COVID19, we look at The Coronavirus Business Interruption Loan Scheme (CBILS), what it means, who is eligible and what you can do to access the scheme.

When did it come into being?

Monday 23rd March 2020

What is the aim of it?

It is being delivered by the British Business Bank to support SMEs to be able to access bank lending and overdraft facilities during this difficult time.

What are the features of CBILS?

The Government will provide accredited lenders with a guarantee of 80% on each loan subject to an overall cap per lender.

The Government will support loans up to £5 million in value.

Interest and fees will be paid by the Government for the first 12 months, including any lender levied fees. Some accredited lenders have agreed not to charge arrangement fees. Fishing, agriculture and aquaculture businesses may not qualify for the full interest and fee payment.

There is no guarantee fee for SME’s to access the scheme.

The scheme may be used for unsecure lending for facilities of £250K or under. That is at the lenders’ discretion. For facilities above £250K, it requires the lender to establish a lack or absence of collateral prior to businesses using the CBILS. Primary residential property cannot be taken as security under the scheme.

The finance terms are up to 6 years for term loans and asset finance facilities. For overdrafts and invoice finance facilities terms will be up to 3 years.

The CBILS will be demand-led so there is no limit to the amount of funding the Government will put into the scheme. The scheme is initially intended to run for 6 months.

Who are the accredited lenders?

Here is the latest up to date list. Accredited lenders are coming on board on a regular basis so the list may change.

Who is eligible to access the scheme?

UK based businesses with an annual turnover of no more than £45 million.

It is open to sole traders, body corporates, limited partnerships, LLPs or other legal entities carrying on business activity.

The business must generate 50% or more of its turnover from trading activity.

The business must operate through a business bank account.

Preferably approach the client’s lender. If not forthcoming approach other lenders who are accredited here.

As there will be great demand apply via the lenders’ website. Phone lines may be busy and there will be limited capacity in the branches to handle this.

Have a borrowing proposal which, were it not for the COVID-19 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 difficulties.

For more information, please call 0113 218 9552 to speak to a member of #TeamNA. Where we are on calls, we will take your details and one of us will call you back.