Tips for accessing the Coronavirus Business Interruption Loan Scheme

cbils covid 19

The Coronavirus Business Interruption Loan Scheme is designed to help SMEs to obtain loans of up to £5 million for 6 years. Read here some useful tips on how to access this scheme. 

Overview of the Coronavirus Business Interruption Loan Scheme

  • The scheme is available to UK-based small and medium sized businesses with a turnover of up to £45 million
  • It is open to sole traders, body corporates, limited partnerships, LLPs or other legal entities carrying on a business activity
  • Loans, overdrafts, invoice finance and asset finance of up to £5 million for up to 6 years is available
  • Borrowing proposal must be viable, but for the COVID-19 crisis
  • Businesses can self-certify that business has been adversely impacted by coronavirus
  • Government will make a Business Interruption Payment to cover any lender levied fees and interest payments for the first 12 months
  • Government will provide lenders with a guarantee of 80% on each loan
  • Lenders will not take personal guarantees for facilities below £250,000
  • For facilities above £250,000, personal guarantees may still be required, at a lender’s discretion, but they cannot be the principal private residence and any recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied.
  • The scheme is delivered through commercial lenders, backed by the government-owned British Business Bank. There are 40 accredited lenders able to offer the scheme, including all the major banks.

Tips for accessing the Coronavirus Business Interruption Loan Scheme

Start by approaching your own bank, as they will understand you and your business. If you have a good existing relationship with a specific bank manager, even better.

Prepare a complete pack of required information in advance, to smooth the process and to reduce the possibility of any delays. Where possible, provide a detailed narrative describing any peaks and troughs in profitability, the strength of the business prior to the coronavirus pandemic and how the business could afford the loan under more usual circumstances. The information pack should contain the following:-

  • Three years of statutory accounts
  • Management accounts, ideally for the past 12 months, but at the very least for the last quarter.
  • A list of aged debtors and creditors
  • Steps taken to mitigate the impact of the COVID-19 crisis on your business. This could include:-
    • Furloughing your employees
    • Deferring your VAT payments
    • Restructuring your supplier terms
  • If the required loan is more than £250,000, you should provide a personal worth statement, showing your net worth with your income and expenditure.
  • Twelve month forecast with an estimate of the total cash requirement. Remember, that you should allow for a severe period of disruption to your business – six months would not be unreasonable.

Be tenacious and remember, that if one lender turns you down, you can still approach other lenders offering the Coronavirus Business Interruption Scheme.

For further information
Government website: Apply for the Coronavirus Business Interruption Loan Scheme
British Business Bank website: Coronavirus Business Interruption Loan Scheme (CBILS) – For SMEs and advisors
Government website: Find coronavirus financial support for your business – online tool
Job retention scheme and furloughed employees FAQs

If you would like to discuss accessing the Coronavirus Business Interruption Loan Scheme or need our support in preparing the information pack for your lender, please do get in touch with the team at DRG Chartered Accountants. We would be delighted to help.

DISCLAIMER: This information is for guidance only, and professional advice should be obtained before acting on any information contained herein. We will not accept any responsibility for loss to any person as a result of action taken or refrained from in consequence of the contents of this publication. 


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