Coronavirus Business Interruption Loan Scheme – What we Know so far

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At the 2020 Budget on Wednesday 11 March, the Chancellor announced a ‘Coronavirus Business Interruption Loan Scheme.   Mike Fenwick, Associate Director of Verde Corporate Finance (part of the GS Verde Group) explains what we know so far. 

The Coronavirus Business Interruption Loan Scheme (CBILS) is designed to assist qualifying businesses during these unprecedented times.    It is likely that the scheme will be open for applications commencing from the week of 23 March 2020.

The Scheme aims to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance.  The loan will be provided by the British Business Bank through participating providers during the Covid-19 outbreak.

The Scheme will give the lender a government-backed guarantee against the outstanding facility balance.   The Government will also cover the first 6 months of interest payments.  The maximum value of a facility provided under the scheme will be £5 million.

The types of finance available will include:

  • Term facilities
  • Overdraft's
  • Invoice finance facilities
  • Asset finance facilities

Finance terms are from 3 months up to 10 years for term loans, and asset finance and up to three years for revolving facilities and invoice finance.

To be eligible for support in the Coronavirus Business Interruption Loan Scheme (CBILS), the small business must:

  • Be a UK-based SME
  • Operate within an eligible sector
  • Comply with relevant state aid rules
  • Have a sound borrowing proposal but insufficient security to meet the lender’s requirements

The detail for criteria and qualification on the Coronavirus Interruption Loans will be key.   There are undoubtedly going to be conditions attached and so presenting applications correctly will be critical to successfully navigating this process.       Verde Corporate Finance can assist you in submitting your application to one of the participating providers.

A list of the coronavirus business interruption local scheme (CBILS) – Accredited Lenders and Partners is located here: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/accredited-lenders/

Mike Fenwick is an Associate Director of Verde Corporate Finance providing experience and expertise to businesses seeking debt funding.  Mike also has a specialist skillset in assisting business with grant applications.