Here is our Guide to the Business Interruption Loan Scheme

Hailed as the answer to those businesses who have seen an immediate drop in revenue, the Coronavirus Business interruption loan Scheme (CBILS) was a potential beacon of hope.

However, for many of our clients making contact with their business managers, they quickly released the bankers and government were not on the same page. Instead they were being led towards the banks own products or being told they had to have personal guarantees on loans. This immediately put off most callers and led to confusion why the government were saying one thing and the banks another.

Happily, a few weeks down the lines things have moved on, the government have issued new guidance and the wheels are beginning to turn. Despite this, this source of funding money is not easily available, you will have to be prepared to answer some questions, produce some figures and demonstrate not only why you need the loan but also that the business can afford to pay it back.

Our guide provides more information about the scheme and your eligibility for it.

This is the info we have received but varies with banks so please do contact your own bank to check:

  • You have you been trading for more than 1 year.
  • You were profitable before the current crisis.
  • Accounting records must be up to date.
  • Be able to demonstrate you have taken up all other possible reliefs.
  • Be able to demonstrate you have taken other steps to cut overheads.
  • Your business has to have been ‘viable’ at December 19.
  • Your business has been affected by COVID 19.

The following finance is available:

  • Term loans and asset finance up to 6 years.
  • 80% of the security is taken by the government.
  • No charge for the 80% government guarantee.
  • Invoice finance and overdrafts up to 3 years.
  • Capital repayment holidays of up to 12 months.
  • First year’s interest and arrangement fees covered by the government.
  • There are no personal guarantees for loans of less than £250k and if over this amount the personal guarantee is only for 20% of the loan.

Be aware though, check the details of any loan you apply for it could be that your loan isn’t a CBIL loan.

We have been told that the maximum loan is 2 times the annual wage bill or 25% of turnover if the business has been open for 2 years or more.

Please do check though your bank could be using different criteria.

If your business has not been trading for two years, then the maximum amount is X1 your annual wage bill.

Typical rates will be between 3.5% to 5%

Again, beware some lenders are, frankly, taking the mick, by pushing higher rated products.

  • Up to date annual accounts submitted to Companies House
  • Management Accounts
  • Cashflow Forecasts – demonstrating a need for the loan.