The Coronavirus Business Interruption Loan Scheme (“CBILS”)

Published by John Walsham on 6 April 2020

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Last updated 6 April 2020

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.

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.

The loan scheme has been divided into two schemes with similar features. The main difference is the maximum lending which depends on the turnover of the business.

  • Businesses with turnover up to £45m can borrow a maximum of £5m under the scheme.
  • Businesses with turnover of between £45m and £500m can borrow up to £25m under the scheme.

SME scheme

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. It is understood from 3rd April 2020 that more businesses will qualify for CBILS support as having insufficient security is no longer a condition to access the scheme.

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.

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

Larger business scheme

The loan scheme for larger businesses (with turnover between £45m and £500m) has been announced but further details are expected in due course. It appears these may not be interest free as the wording of the scheme on the main government website is silent on this.

Lending covered by the scheme includes:

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

 

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 and CCFF scheme applications. We understand how lenders are currently making credit decisions, and for CBILS 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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