Coronavirus Business Interruption Loan Scheme (CBILS) FAQs
The Coronavirus Business Interruption Loan Scheme (CBILS) provides financial support to smaller businesses (SMEs) across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak.
The scheme is being expanded from Monday 6 April 2020 and is a part of a wider package of government support for UK businesses and employees.
Read more using the following links: https://www.businesssupport.gov.uk/coronavirus-business-support/
As with all the financial support being provided for businesses, we are receiving numerous queries on how these schemes work.
We have therefore put together a list of the most commonly asked questions which we hope you will find useful.
Please do read the guidance at the above link as well as our FAQs below.
What is CBILS?
The scheme is designed to support those businesses that were trading successfully before coronavirus, but now face difficulty as a result of the current disruption and for those businesses whose growth requirements cannot be supported under normal bank lending criteria.
What is the criteria to be eligible?
To be eligible for support through CBILS, your business must:
- Be UK-based with group turnover of no more than £45m per annum.
- Operate within an eligible industrial sector. There are a considerable number of sectors eligible to participate but a small number are not.
Insufficient security is no longer a condition to access the scheme.
What size of loans are available?
You can apply for a loan between £5k to £5m.
Over how many years can a loan be taken?
CBILS are available for terms of up to 6 years.
How much will this cost?
The government will cover interest and fees for the first 12 months of the loan. After this interest will be payable.
Will I need to provide a personal guarantee?
As a result of the expansion of the scheme, personal guarantees of any form will not be taken for facilities below £250,000.
Above this level, personal guarantees may still be required, at the lender’s discretion, but:
- recoveries are capped at 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied
- a Principle Private Residence (PPR) cannot be taken as security to support a personal guarantee or as security for a CBILS-backed facility
What information do I need to provide to my bank?
You will need to provide accurate and up-to-date information to support your application and this may vary by bank, but will generally include:
- A brief update on the performance of your business prior to the onset of the virus
- Any internal information showing the 12 months performance of your business prior to the impact of Coronavirus (e.g. management accounts or audited accounts for 2019)
- The impact of Coronavirus on your business
- A set of forecasts which estimates your total cash requirement over the next 12 months and the amount of borrowing you’re seeking
- Any key assumptions or risk factors which may impact the above
- Any schedules of Hire Purchase or third-party finance commitments (including current balances, repayment commitment details and expiry dates)
- The extent to which you’ve explored other areas of funding or Government support
- Outline any longer-term impacts which may mean this is not appropriate
To help, you can read our pages about Handy Tips for helping with Cashflow and Why Management Accounts are Important Right Now
When can I apply?
You can apply now
Can Rayner Essex assist in applying for CBIL?
Yes of course, we can help with the application process and prepare the reports and overall information packs to support an application.
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