24 March 2020
Business Interruption Loan
The Business Interruption Loan Scheme (CBILS) is a government backed facility offered in response to the coronavirus pandemic. The UK government will guarantee 80% of certain new loans and other finance facilities up to £5m for SMEs who are experiencing lost or deferred revenues, leading to disruptions in their cashflow.
The scheme will be provided by the British Business Bank and made available through 40 participating lenders. Interest for the loan is covered by the Government for the first 12 months and all arrangement and guarantee fees are also covered.
The scheme provides the lender with a government-backed guarantee against the outstanding facility balance.The purpose of the guarantee is to encourage banks to lend when they would normally say no. Potentially turning a 'no' credit decision from a lender to a 'yes'. It is important to remember this is only where the purpose for saying 'no' is due to the coronavirus situation.
If the SME was struggling and had no reasonable way of repaying the loan it is unlikely that the decision to lend would change. The SME will have to demonstrate a credible business plan and a very realistic plan for repaying the loan at some point.
Qualifying Business Finance Facilities:
Contact us on 01778 309777 for a free consultation
Click here to find details on the government backed Business Bounce Back Loan
Business Finance Advisory Team