Coronavirus Business Interruption Loan Scheme (CBILS)

Having started getting involved in applying for the CBILS and having applied ourselves, we thought we would provide with an update after the Government announcement.

The recently launched Coronavirus Business Interruption Loan Scheme (CBILS) has now been significantly expanded along with changes to the scheme’s features and eligibility criteria. The changes mean even more smaller businesses across the UK impacted by the Coronavirus crisis can access the funding they need.

Importantly, access to the scheme has been opened up to those smaller businesses who would have previously met the requirements for a commercial facility but would not have been eligible for CBILS. This significantly increases the number of businesses eligible for the scheme. The expanded scheme will be operational with lenders from Monday 6th April 2020.

The CBILS website remains the best source of up to date information and we would direct any queries here rather than to ourselves.

New scheme features

  • No personal guarantees for facilities under £250k: Personal guarantees of any form cannot be taken under the scheme for any facilities below £250k.
  • Personal guarantees for facilities above £250k: Personal guarantees may still be required, at a lender’s discretion, but 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.
  • A Principal Private Residence (PPR) cannot be taken as security to support a personal guarantee or as security for a CBIL backed facility.
  • Security: For all facilities, including those over £250,000, CBILS can now support lending to smaller businesses even where a lender considers there to be sufficient security, making more smaller businesses eligible to receive the business interruption payment.

After some of the horror stories we had seen, it is great to now have this clarity and the fact that some banks had been offering APR’s at 29%; yes 29%, we believe the Government has clamped down on this.  We also believe that fewer business should now be getting forced down the commercial loan route first.

Don’t forget though it is all about responsible lending and if repayment is likely to be beyond the 12 month period then other options might be more suitable and actually cheaper.

A friend or contact in need

Never has it been more important to stick together in such times and no more than ever we are here for you to support you however we can.

Can we kindly ask that you listen out across social media, in your circle of friends and contacts, for anybody who too would benefit from the same support that you too are receiving.

Even if they just registered for our newsletter; which they can do by just clicking onto our website here, or if they were to take advantage of our newly introduced and dedicated COVID-19 (click here) and Cash Flow SOS page (click here), you would be helping them out.

Together, we can get through this.

Final note

We have already mentioned this once but don’t forget to cancel those direct debits in respect of your VAT and self-assessment.

Finally, all submissions with regards to VAT and self-assessment remain so we still need everything we required beforehand so please just note this.

 

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