If your business has been adversely affected by the coronavirus pandemic, you may be eligible to apply for the Coronavirus Business Interruption Loan Scheme.
This scheme (CBILS) provides financial support to smaller businesses affected by coronavirus and offers loans and other types of finance up to £5 million. The scheme is only open until the 31st January 2021 so make sure you apply if you are eligible.
How it Works
If you are UK business with an annual turnover of up to £45 million, you may be eligible to apply for a loan. Through this scheme, the government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months. However, in order to apply, you will need to show that your business has been adversely affected by the coronavirus and that it would be otherwise viable if it were not for the current pandemic.
If you wish to borrow £30,000 or more, you will also need to confirm that your business was not classed as a business in difficulty on the 31st December 2019.
Who Can I Apply?
Businesses from any sector or industry can apply apart from:
- banks, insurers and reinsurers (but not insurance brokers)
- public-sector bodies
- state-funded primary and secondary schools
If your application is successful, you can borrow up to three years for overdrafts and invoice finance facilities and up to six years for asset finance facilities and loans.
How to Apply
There are currently 117 lenders taking part in the scheme, including all the main retail banks.
You can find the list of lenders participating in the scheme here:
You will need to approach the lender via their website and tell them how much you would like to borrow, what the money will be used for and how long you would like to pay it back. You will also need to provide documents such as management accounts, cashflow forecast or historic accounts that demonstrate that you can afford to make the repayments.
The lender will assess whether the loan is affordable for you and suitable for business purposes. They will then decide whether to offer you a loan or another type of finance. If you are offered a loan or finance agreement, you will be required to pay back the full amount borrowed.
If you turned down by one lender, you can apply to other lenders in the scheme. You may also want to consider using a broker to find the right type of financial help for your circumstances. You can conduct your own research on this by using the British Business Bank’s finance guide.
With many small and medium sized businesses suffering because of the pandemic, we are here to ensure you have the most updates advice and guidance to help you during these uncertain times.
We update our blog regularly, so make sure you keep coming back to find out the latest help and support available to you.