Coronavirus Business Interruption Loan Scheme

Background
The Chancellor of the Exchequer has announced the creation of the Coronavirus Business Interruption Loan Scheme to support small businesses with cashflow.

How much is available
Loans are available for up to £5m, interest free for 12 months. Terms range from three to six years, depending on the type of finance sought. There are no scheme guarantee fees payable to secure a finance product under this scheme. This means businesses will benefit from no upfront costs and lower initial repayments.

Businesses remain 100% liable for any debt as a result of applying under this scheme.  

Who is eligible
In order to be eligible, you must:

  • Be UK based
  • Have an Annual Turnover of no more than £45m
  • Generate more than 50% of your turnover from your trading activity
  • Self-certify that your business has been adversely impacted by the COVID-19 pandemic
  • Have a borrowing proposal which the lender
    • would consider viable, were it not for the COVID-19 pandemic
    • believes will enable you to trade through any short-term to medium-term difficulty

The following business sectors are not eligible to apply:

  • Banks and building societies
  • Insurers and reinsurers (but not insurance brokers)
  • Public Sector Organisations
  • Employer, professional, religious or political membership organisations
  • Trade Unions

The government is currently developing a scheme for businesses with a Turnover between £45m – £500m.

How to claim
There are over 40 accredited lenders subscribed to the scheme. You can view a full list here. Business should approach a lender of their choice directly.

Businesses can apply directly for CBIL finance products; they are not required to take a commercial product instead, even if they would have qualified for one.

For facilities below £250,000, no personal guarantees will be requested by lenders.

For facilities of £250,000 and above, personal guarantees may still be required, at the lender’s discretion, but:

  • they exclude the Principal Private Residence, and
  • recoveries under these are capped at a maximum of 20% of the outstanding balance of the facility, after the proceeds of business assets have been applied.

Full details of the scheme can be found here.

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