The Coronavirus Business Interruption Loan Scheme (“CBILS”) – now closed

Published by John Walsham on 3 November 2020

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The Coronavirus Business Interruption Loan Scheme is now closed. You can find out more about the replacement Recovery Loan Scheme here. The article below should only be used for archival or research purposes.

The British Business Bank’s CBILS facilitates business finance to smaller businesses that are viable but experiencing lost or deferred revenues, leading to disruptions to their cashflow. The borrower always remains 100% liable for the debt. The deadline for CBILS has been extended to 31 March 2021. It seems that not all banks are applying the same approach to this extension so please check with your lender that they will continue to participate in this scheme beyond 31 January 2021.

Details of the scheme are now available from the British Business Bank here.

We are ready to assist our clients with the application process as the lender will be looking for a sound borrowing proposal with supporting forecasts. We are well placed to bring our knowledge of our clients and the lenders credit decision-making together to advise you. This will allow clients to remain focused on running day-to-day operations during this crucial period. Please get in touch with your usual Kreston Reeves contact for further information on how we can help or myself.

How the CBILS works

  • Businesses with turnover up to £45m can borrow up to £5m under the scheme.
  • Businesses with turnover over £45m should look at the new CLBILS facility.

A major feature of the loan is that it will be interest free to the borrower for 12 months and in addition can include capital repayment holidays of up to 12 months.

Personal guarantees will not be required for lending below £250,000 and above this sum will be considered on a case by case basis by the lender but recovery under the guarantee is capped at 20% of the outstanding CBILS loan after all other recoveries have been applied.

Lending covered by the scheme includes:

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

To be eligible the business must:

  • Be UK based, with turnover of no more than £45 million per annum
  • Operate within an eligible industrial sector (a small number of industrial sectors are not eligible for support)
  • Have a sound borrowing proposal
  • Be able to confirm that they have not received state aid beyond €200,000 equivalent over the current and previous two fiscal years

The CBILS deadline has been extended to 31 March 2021 but check with your lender that they are still participating in the scheme.

Read more on our CBILS Q&A article here.

For further information on this topic please contact your usual Kreston Reeves contact or myself here.

How can we help?

Our team is well resourced and experienced in advising companies and not-for profit organisations, allowing you to focus on managing your business during this trying period. We are set up to work from home so you can expect the same level of service, albeit remotely rather than in-person. We have:

  • A team of debt advisory and corporate finance experts used to working with banks and other lenders, and can support you with CBILS, CLBILS and CCFF scheme applications. We understand how lenders are currently making credit decisions, and for CBILS/CLBILS loans above £250k particularly can help with your application.
  • Our restructuring and insolvency experts can advise businesses under stress about the options available to them.
  • Our tax experts will also be on hand to advise you on applications to HMRC for the Time to Pay initiative, for corporate tax advice and R&D tax claims. We also have VAT & Duty experts who can support you in revising your VAT position.

Do call us on 0330 124 1399, via our enquiry form or speak to your usual Kreston Reeves contact.

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