The treasury announced some significant changes to the CBILS programme on the evening of 2 April 2020:
- the requirement to have insufficient security / not be eligible for a commercial loan has been lifted; and
- Personal Guarantees can now only be enforced up to a maximum of 20% of the outstanding balance after business assets have been realised.
In addition a new scheme very similar to CBIL but for businesses turning over £45m - £500m was announced, the Coronavirus Large Business Interruption Loan Scheme (CLBILS). The full details of this are to be announced later this month and we will provide an update once more details are available
CBILS is the government scheme under which interest free loans of up to £5m are being made available to SMEs negatively impacted by COVID-19.
The loans are 80% guaranteed by the government via the British Business Bank, but are actually issued via participating lenders. There are over 40 lenders participating in the scheme, including all of the major high street lenders and a number of challenger banks and alternative lenders.
The government will cover the cost of the first 12 months of interest and any fees.
In order to apply you must:
There are unfortunately a few reasons why CBILS may not be particularly helpful in practice.
If you think you will be eligible the easiest route to apply is via your existing contact at your lender, assuming that they are part of the scheme. You can check which lenders are part of the scheme here, and if your current lenders are not part of the scheme then you will need to contact a lender who is.
If you have any queries in relation to any of the above or any other queries around financing your company at this time, please contact Ed Hobbs.
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