The government announced a new temporary Coronavirus Business Interruption Loan Scheme (CBILS), delivered by the British Business Bank, launched on 23rd March 2020 to support primarily small and medium-sized businesses to access bank lending and overdrafts.
The scheme is for businesses with viable borrowing proposals, up to £5 million in value, that the COVID-19 outbreak has ‘interrupted’. Businesses can access the first 12 months of that finance interest-free, as the government will cover the first 12 months of interest payments. Businesses are eligible for the scheme if they:
- are UK based, with a turnover of no more than £45 million per year
- meet the other British Business Bank eligibility criteria.
When the scheme was announced it was not open to businesses who could access loans on commercial terms. However, the government agreed these businesses can access the scheme if they self-certify the impact coronavirus has had on them and they have a viable borrowing proposal. Another change to the scheme means lenders cannot ask directors for personal guarantees on any loans under £250,000. Businesses with loans over £250,000 will have recoveries capped at 20 percent of the outstanding CBILS facility amount.
The changes are backdated to 23rd March 2020.
How to access the scheme The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/