Coronavirus Business Interruption Loan Scheme
Launched in response to the coronavirus outbreak, the Coronavirus Business Interruption Loan Scheme (CBILS) is designed to support UK businesses during this period of disruption. It is a government-backed initiative for businesses with a group turnover of up to £45 million.
Deadline for applications 31st March 2021
We’ve helped over a hundred businesses in Scotland, so far, to raise £10 million in CBILS funding. These funds have not only helped save jobs and businesses, but they have also allowed investment in growth and infrastructure, provided cashflow and working capital certainty, and have allowed businesses to restructure existing finance obligations, which were previously prohibiting cashflow. And because the Government covers the first 12 months’ interest, CBILS funding also provides a breather in repayments for the first 12 months of the borrowing!
WHO WE'VE HELPED
COULD YOUR BUSINESS BENEFIT?
WHO QUALIFIES?
This varies from lender to lender, but generally the below applies:
- UK-based business that’s been adversely affected by coronavirus. Maybe your supply chain was disrupted, maybe you had staff on furlough, maybe payment terms from customers have slowed down
- Turnover of over £200,000
- Minimum 3 years of trading history for loans and 2 years for asset finance and refinance products
- Over 50% of turnover from trading activity (e.g. not from investments)
- Loan is for business purposes
- Loan is primarily for trading in the UK
THE HIGHLIGHTS
You can have multiple CBILS loans with multiple providers, however if you have taken out a ‘bounce back’ loan, this must be repaid.
- Loan is primarily for trading in the UK
- No Personal Guarantees taken for individual facilities under £250k
- There are no early repayment charges for the borrower, so even if you take funding and end up not using it, the facilities can be repaid with no penalties or fees
The info you need to hand when applying.
- Last year end accounts
- UTD management accounts
- Previous 12 months bank statements (downloaded in PDF form)
- Directors/Partners/Proprietors details (last 3 years address and date of birth)
THERE ARE 3 MAIN OPTIONS
1.
CBILS Loan
- A straightforward loan over a term of up to 5 years
- Loan amounts available from £50,001 to £5m
- Typically, the loan amount will be 25% of your 2019 turnover
- Your company needs to have been profitable in your 2019 accounts
- Funds can be used for any purpose
- We use a panel of alternate lenders, so even if you have been turned down by your main bank, our panel has a more flexible underwriting criteria and a greater chance of approval
- Rates vary depending on credit score of your business, but start from as low as 1.8%apr
- Government-backed guarantee for 80% of the total amount
- No PGs required for facilities up to £250k
2.
CBILS Asset Finance
If you are looking to acquire a new asset or re-finance an existing asset, and your business has experienced difficulties as a result of the Coronavirus pandemic, CBILS may be available to support you. Used when purchasing a new asset i.e. plant, equipment, machinery, vehicles, etc
- Terms from 12 months to 84 months
- Advances from £50k to £5m
- New or Used assets qualify
- Can be arranged with nothing to pay for the first 12 months
- Government-backed guarantee for 80% of the facility amount
- No Personal Guarantees on facilities up to £250k
3.
CBILS Refinance
This facility is used where you have equity in your current plant, machinery, equipment or vehicles and are paying an existing finance company each month.
This has 3 main benefits:
- Can remove your current monthly HP/Lease obligations for a year, in some cases we have saved up to £180k per month in cash outgoings for our clients by doing this
- Can remove, or significantly reduce existing PG obligations on existing facilities
- As well as cash savings, we can get a cash injection into the business by sweating the value of equity tied up in the assets.
The refinance product applies to any company who has assets currently on existing finance agreements and we have seen a highly successful uptake by our clients including Plant Hire, Engineering companies, Coach companies and Haulage companies.
TIME IS RUNNING OUT!
Contact us today to find the best solution and lender for you as time is running out! The deadline for applications is 31st March 2021 – and you’ll need to have all your paperwork at the ready beforehand.
As a reminder the information you need to hand when applying…
- Last year end accounts
- UTD management accounts
- Previous 12 months bank statements (downloaded in PDF form)
- Directors/Partners/Proprietors details (last 3 years address and date of birth)
What to do next?
You can find out more about the different lenders and see a full explanation of the scheme at the official British Business Bank website.
Note that many of these lenders do not provide to Scottish businesses. We work with those that do and so can advise who the best lender for you will be. It also means that we can approach alternative lenders, should you need to.