Small Business Interruption Loan – Small and medium-sized businesses in the UK can now apply for funding through the Business Interruption Loan Scheme (CBILS) to help them cope with business operating costs and support cash flow.
The scheme is available to businesses with a turnover of up to £45m doing business in the UK. At least 50 percent of the economic turnover must be accounted for by trading activities.
Small Business Interruption Loan
The decision as to whether you can get a CBILS is left to accredited CBILS lenders, which range from large banks to smaller specialist local lenders. Therefore, businesses must go through a full credit assessment procedure for each application they submit.
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The lender will review your application and probably first check whether you qualify for a loan on normal commercial terms or whether CBILS is more suitable.
Certain sectors will not be eligible to apply for a loan under the scheme. Full details of the requirements and a link to the UK Business Bank FAQ can be found here.
Funding can take the form of loans, overdrafts, invoice finance or asset finance, although each lender will be able to choose which elements of the scheme they support.
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The facilities will be available from £1,000 to £5m depending on the lender’s criteria. CBILS will be interest-free for the first 12 months as the government has guaranteed to cover these payments during this period.
The Government and the British Business Bank, which helps run CBIL, have confirmed that there will be no set-up fee.
The borrower will remain 100 percent responsible for the debt. The 80 percent guarantee offered by the government is simply to give the lender a right of recourse in case the borrower defaults on his debt.
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The scheme will be implemented through existing commercial lenders with the support of the state-owned British Business Bank. There are currently 40 accredited lenders that can offer this scheme, but new ones are being added regularly.
British Business Bank has pointed out that it may be beneficial to first seek funding through a lender you have a relationship with.
If you think you may need access to this scheme, you should collect the information you need to apply. We can help you prepare supporting evidence to support your claim.
Recovery Loan Scheme
To find out how we can help you with your CBILS application, or for advice on lender preferences, please contact us. On March 31, 2021, the Coronavirus Business Interruption Loan (CBILS) program closed to new applications. If you’ve started applying before, we’ll get back to you shortly – no need to call us.
We are awaiting further information from British Business Bank on the possibility of extending the CBILS loan – we will update this page as soon as we have more information.
To support the customer’s cash flow, the arrangement fees and interest for the first 12 months will be paid by the UK Government as a ‘Business Termination Payment’.
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You are responsible for repaying 100% of the loan. If a default occurs, we follow our standard commercial recovery procedures (including implementing insurance) before making claims against the government guarantee for any shortfall. Loans are available for most business sectors, but restrictions apply
CBILS is managed by the British Business Bank on behalf of and with the financial support of the Secretary of State for Business, Energy and Industrial Strategy. British Business Bank plc is a development bank wholly owned by Her Majesty’s Government. It is not approved or regulated by the PRA or the FCA. Visit british-business-bank.co.uk
CBILS is not available to businesses borrowing £50,001 or more if the business was a ‘business in difficulty’ on 31 December 2019. “Business in difficulty” is defined in Article 2(18) of Commission Regulation (EU) no. 651/2014 of 17 June 2014 When you apply, we will ask you to confirm that your company was not a company in difficulty on 31 December 2019.
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The rules for deciding whether you are a ‘business in difficulty’ have now changed for small businesses – see our FAQs below for more details.
We could help you expand, invest in equipment or borrow working capital with secured and unsecured business loans.
Overspending can help you deal with seasonal trends and short-term cash flow problems. Borrow up to £50,000 without collateral – the money can be available to you in days.
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Free up cash tied to your outstanding bills. Being able to finance invoices helps improve your cash flow, whether it’s this month, next month or later. We partner with Kriya, industry experts and billing provider to help you grow your business. Chancellor Rishi Sunak announced in the Budget today that the government is launching a new multibillion-dollar guaranteed business loan scheme at the end of the month.
The Recovery Loan Scheme (RLS) will replace the Recovery Loan Scheme (BBLS) and the Coronavirus Business Interruption Loan Scheme (CBILS/CLBILS), which close to new applicants on 31 March.
“When the reverse loan and CBIL schemes come to an end, we are introducing a new recovery loan scheme to take their place.”
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The RLS offers an 80 per cent government guarantee to participating lenders on SME loans of between £25,000 and £10 million to continue to encourage new lending.
The scheme will be open to all companies, including those who have already borrowed under BBLS, CBILS or CLBILS.
It is not yet clear which lenders will take part in the new RLS scheme, although Funding Circle and Starling Bank have said they are considering it, with previous lenders in the schemes including Capital On Tap, Starling Bank, Atom Bank and Iwoca.
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“We welcome the government’s recovery loan scheme, which will continue to support small and medium-sized businesses as they emerge from the pandemic,” said Lisa Jacobs, managing director for Europe at Funding Circle.
“We look forward to making lending easier under the new scheme, providing small businesses with the finance they need to invest, create jobs and kick-start the economic recovery.”
A spokesman for Starling Bank, which has lent more than £1bn under BBLS and CBILS, said: “Starling welcomed the opportunity to support companies through the CBILS and BBLS scheme and we want to continue to support our business customers, so we will explore the new scheme and We will notify our customers.”
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British Business Bank this afternoon set out more details for RLS, including the fact that lending will be peer-reviewed (unlike BBLS) and that interest will be charged from the outset and over six years.
Ravi Anand, managing director of SME lender ThinCats, which participated in CBILS, said: “We look forward to more details on the eligibility criteria, however the increase in the maximum loan size to £10m is also welcome as it will allow for significant investment by many medium-sized and large businesses that have been constrained by the CBILS scheme.” The tracker serves as a barometer of businesses’ response to government measures and changes in business practices over the next few months. It also tracks how quickly new government interventions introduced to combat the real the impact of this crisis, reaching businesses on the front line.
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