Launched on the 23rd March, the Coronavirus Business Interruption Loan Scheme (CBILS) is designed to help SMEs access bank lending and overdraft facilities to help during these challenging conditions. However in response to significant criticism, levelled at the Government and lending institutions, a number of changes have been announced.
What have been the problems since the launch of the CBILS?
- Lenders were not lending, with businesses being offered usual commercial loans
- Lenders were asking for personal guarantees to cover 100% of the loans.
- The interest rate charged by some accredited lenders could be as high as 30%.
- There is a delay of up to 6 weeks in providing the loan in some cases.
What changes have the government now made to the CBILS?
- Applicants can apply purely through the CBILS, so that they do not have to go down the normal commercial lending route. There are now more 40 accredited lenders across the UK
- Personal guarantees are not required to secure lending below £250,000
- For loans greater than £250,000 personal guarantees will be capped at 20%. The government will provide the guarantee for the remaining 80% of the finance.
How to apply
You should apply via your lender’s website or through one of the 40 accredited finance providers offering the scheme. The lender has the authority to decide whether or not to offer you finance.
Please note that if you have already been turned down for a loan under the earlier conditions, you can still reapply under the new rules.
For further information
Business Support - Coronavirus Business Interruption Loan Scheme
And don't forget about Business Support Grant Funds
There are two grant funding schemes available, the Small Business Grant Fund and the Retails, Hospitality and Leisure Grant Fund. The Local Authorities will be contacting eligible businesses directly to arrange payment of the grants.
For further information on the Business Support Grand Funds
Small business grand and retail leisure and hospitality grant guidance for businesses
If you would like to discuss the CBILS, Business Support Grants and your business, please do get in touch with the team at DRG Chartered Accountants - we would be delighted to hear from you.
DISCLAIMER: This information is for guidance only, and professional advice should be obtained before acting on any information contained herein. We will not accept any responsibility for loss to any person as a result of action taken or refrained from in consequence of the contents of this publication.
