We've all heard lots about the scheme, but how do you actually get your hands on the cash? Is it free cash? Who is providing the loan?
First, please note that the CBILS scheme is NOT a grant scheme. This is money you are borrowing and it will need to be paid back and anyone lending you the money will need to be sure you are going to be able to repay the money in the future.
Second, let’s start with the information from the British Bank’s page regarding the CBILs scheme and further down I will comment on some of the individual banks and their current view on how to apply.
CBILS: Key Features
• Up to £5m facility: The maximum value of a facility provided under the scheme will be
£5m, available on repayment terms of up to six years.
• 80% guarantee: The scheme provides the lender with a government-backed, partial
guarantee (80%) against the outstanding facility balance, subject to an overall cap
per lender.
• No guarantee fee for SMEs to access the scheme: No fee for smaller businesses. Lenders
will pay a fee to access the scheme.
• Interest and fees paid by Government for 12 months: The Government will make a
Business Interruption Payment to cover the first 12 months of interest payments and
any lender-levied fees, so smaller businesses will benefit from no upfront costs and
lower initial repayments.
• Finance terms: Finance terms are up to six years for term loans and asset finance
facilities. For overdrafts and invoice finance facilities, terms will be up to three years.
• Security: At the discretion of the lender, the scheme may be used for unsecured lending
for facilities of £250,000 and under. For facilities above £250,000, the lender must
establish a lack or absence of security prior to businesses using CBILS. If the lender can
offer finance on normal commercial terms without the need to make use of the scheme,
they will do so.
• The borrower always remains 100% liable for the debt.
Eligibility Criteria
Smaller businesses from all sectors can apply for the full amount of the facility. To be eligible for a facility under CBILS, an SME must:
• Be UK-based in its business activity, with annual turnover of no more than £45m.
• Have a borrowing proposal which, were it not for the current pandemic, would be
considered viable by the lender, and for which the lender believes the provision of
finance will enable the business to trade out of any short-to-medium term difficulty.
Please note: If the lender can offer finance on normal commercial terms without the need to
make use of the scheme, they will do so.
Click below to view or download our FREE guide to CBILS, which contains further information about the scheme, the information you'll need to provide when applying and the terms on offer from the high street banks.
If you have any questions at all, please get in touch with our expert advisers on 01473 851587 or email enquiries@conatusfinancing.solutions.