Coronavirus emergency business support launched
The government-backed Coronavirus Business Interruption Scheme (CBILS) is now open for applications. Smaller UK businesses can apply for facilities of up to £5 million through over 40 accredited lenders.
Is my business eligible for CBILS funding?
- If your business is struggling under the weight of the COVID-19 outbreak, you may be eligible to apply for funding of up to £5 million.
- CBILS is available to businesses that are UK-based in their activity with a turnover of less than £45 million per year.
- You should have a proposal that a lender would have considered viable had the virus not hit.
- Smaller businesses from all sectors can apply for the full amount of the facility, but there are some exceptions*.
How do I apply for CBILS?
CBILS is available through more than 40 accredited lenders and partners listed on the British Business Bank website. In the first instance, you should approach your own provider – ideally via the lender’s website.
You may also consider approaching other lenders if you are unable to access the finance you need. You are encouraged to apply directly via the lender’s website, as telephone lines might be busy and branches may have limited capacity because of the outbreak.
Government-backed financial support available for businesses currently includes:
- Coronavirus Job Retention Scheme
- Cash grants from local authorities
- Business rates holiday
- Covid Corporate Financing Facility (CFFF)
- Statutory Sick Pay (SSP) relief for SMEs
- Deferred VAT and income tax payment
This information is up to date as of 9 April 2020, and will be updated in line with information released from HM Government as this becomes available.
What are the features of CBILS?
The Coronavirus Business Interruption Loan Scheme (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 from a lender to become a ‘yes’.
- Facility of up to £5 million: The maximum value of a facility provided under the scheme will be £5 million, available on repayment terms of up to six years.
- No guarantee fee for SMEs to access the scheme: This means no fees for smaller businesses. However, lenders will pay a fee to offer funding through CBILS**.
- 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 fees, so smaller businesses will benefit – 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: Under the scheme, lenders will not take personal guarantees of any form for facilities below £250,000. For facilities above £250,000, personal guarantees may still be required, at a lender’s discretion, but (1) they exclude the Principal Private Residence (PPR), and (2) recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied.
- The borrower always remains 100% liable for the debt.
We’ve collated advice and support from industry partners, many of whom have created resources to help businesses in this challenging time.
You can find more information about managing cash in a time of uncertainty, including support for businesses affected by COVID-19, and by EU Exit, in new and updated information in the Business Finance Guide.
* Businesses from any sector can apply, except banks, insurers and reinsurers (but not insurance brokers); public-sector bodies; further-education establishments (if they are grant-funded) and state-funded primary and secondary schools.
** Fishery, aquaculture and agriculture businesses may not qualify for the full interest and fee payment.