Coronavirus Business Interruption Loan Scheme
The British Business bank have released further details of the banks and lenders who are currently accredited to offer the new CBILS loans. You will probably find that your current bank is on there, many of the high street banks have already been approved such as HSBC, Barclays, Natwest, Lloyds, Metro, Santander and many more at the time of writing. There are also a number of lenders who will be offering particular finance services such as Hitachi, Arkle Finance and Genesis.
This is not an exhaustive list and it is being updated as and when new lenders are accredited. To see the full list please visit the British Business Bank website here.
CBILS: Key Features:
- Up to £5m facility: The maximum value of a facility provided under the scheme will be £5m, available on repayment terms of up to six years.
- 80% guarantee: The scheme provides the lender with a government-backed, partial guarantee (80%) against the outstanding facility balance, subject to an overall cap per lender.
- No guarantee fee for SMEs to access the scheme: No fee for smaller businesses. Lenders will pay a fee to access the scheme.
- Interest and fees paid by Government for 12 months: The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees (some banks are waiving fees), so smaller businesses will benefit from no upfront costs and lower initial repayments (there are some exemptions).
- 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: 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 lender must establish a lack or absence of security prior to businesses using CBILS. If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.
- The borrower always remains 100% liable for the debt.
What finance is on offer?
CBILS supports a wide range of business finance facilities, including:
- Term loans
- Asset finance
- Invoice finance
Not every lender can provide every type of finance listed.
CBILS is available through the British Business Bank’s 40+ accredited lenders, which are listed on the British Business Bank website here.
In the first instance, businesses should approach their own provider – ideally via the lender’s website. They may also consider approaching other lenders if they are unable to access the finance they need.
Decision-making on whether you are eligible for CBILS is fully delegated to the 40+ accredited CBILS lenders. These lenders range from high-street banks, to challenger banks, asset-based lenders and smaller specialist local lenders.
If the accredited lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.
Given there is likely to be a big demand for facilities once the scheme goes live, we ask you to please:
- Consider applying via the lender’s website in the first instance. Telephone lines are likely to be busy and branches may have limited capacity to handle enquires due to social distancing
- Consider the urgency of your need – it is possible that some businesses may be looking for regular longer-term finance rather than ‘emergency’ finance, and there may other businesses with a more urgent need to speak with a lender
The information we are providing is from the British Business Bank and is not from us directly. Additional information can be found here: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/
Here at Ten Forward we will help you as best we can to ensure you are able to access any available funding. We will be able to assist you in reviewing your financials to see how much funding you may potentially need and with getting together any documents required in the process for applying for any lending, however we are not able to advise on which facility is best for you.
Please get in contact with the team if you would like to discuss the options that are available.