Coronavirus Business Interruption Loan Scheme (CBILS) FAQs


What is the Coronavirus Business Interruption Loan Scheme (CBILS)?

The Coronavirus Business Interruption Loan Scheme (CBILS) is a government scheme that provides financial support to UK SMEs that are losing revenue or are experiencing cashflow disruptions as a direct result of the COVID-19 pandemic.

Who is eligible?

Any business with an annual turnover below £45 million will be eligible to apply for a loan of up to £5 million. Crucially, borrowing businesses will not be charged any interest or fees for the first 12 months. As part of the CBILS scheme, 80% of any net losses to the lender of a CBILS backed loan will be guaranteed by the government.

To summarise, to be considered for a CBILS loan your business must:

  • Have an annual turnover that is less than £45 million
  • Be a UK based business
  • Have a viable lending proposition that the lender would have considered valid prior to the COVID-19 pandemic
  • Verify it has been negatively/adversely impacted directly by the COVID-19 outbreak

What are the funding methods?

CBILS provides UK SMEs with up to £5 million of funding in the form of:

  • Business Loans
  • Overdrafts
  • Invoice Finance
  • Asset Finance

Will a CBILS loan require a personal guarantee?

For a funding facility under £250,000, personal guarantees in any form will not be required by lenders. Funding applications over £250,000 may require personal guarantees but this is at the lenders discretion. However, these personal gurantees will exclude:

  • Personal Private Residence (PPR) and...
  • recoveries under these gurantees are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied

Is CBILS a grant?

No, any funding received via CBILS is a loan and you will be responsible for repaying the loan as per the agreement with your lender.

Are there any sectors that aren't eligible for CBILS funding?

CBILS covers a vast and broad range of sectors however the following sectors WILL NOT be eligible:

  • Employer, professional, religious or political membership organisations
  • Trade Unions
  • Public sector organisations, including state-funded schools
  • Insurers and reinsurers (not including insurance brokers)

How do I apply for a CBILS loan?

To find out if you are eligible for a CBILS loan, speak with your current bank to see what products or schemes they can offer to help your business.

If you are experiencing issues applying through your current banking provider, you can also apply to other lenders such as challenger banks and non-bank lenders. Following amends to the scheme made on April 3rd, accredited CBILS lenders no longer need to ascertain whether your business is eligible for any of their existing products before CBILS is considered.

Its most definitely worth exploring other funding options if your bank can't help you with a CBILS loan, and if CBILS doesn't fit your requirements there are a plethora of other finance products that could be a good fit for your requirements.

What information will I need to supply?

The basic information required by lenders will be:

  • The amount you are looking to borrow
  • The purpose of the loan i.e. what it will be used for
  • The length of time you would like to repay the loan
You will also need to provide supporting documentation to make your application. A comprehensive list of the type of info you will you need can be found here:

Lending Criteria Tips

For what purposes can CBILS be used?

CBILS was introduced to offer support to SMEs who do not currently meet the normal lending requirements for a commercial loan but would be a viable proposition in the long term were it not for the COVID-19 pandemic. It is intended to help businesses trade out of any short to medium term difficulty they may be currently be facing as a result of the coronavirus outbreak.

To that end, CBILS loans must be utilised to support trade within the UK and can be used for the following purposes:

  • Project Development
  • Cash flow management such as paying staff
  • Property lease or purchase
  • Starting a business or expanding an existing business
  • Research and Development
  • Purchasing stock

How long will the CBILS scheme run for?

At the time of writing (April 3rd 2020), CBILS will initially run for 6 months.

If you would like to speak to us about your own finance facilities or would like to explore options, please email us at: info@thebusinessboard.co.uk or call our office number on 0118 338 1818.