News

Coronavirus Business Interruption Loan Scheme – Temporarily Replacing the Enterprise Finance Guarant

IMPORTANT UPDATE: At Budget 2020, the Chancellor announced that a ‘Coronavirus Business Interruption Loan Scheme’ (CBILS) will temporarily replace the Enterprise Finance Guarantee (EFG), becoming available over the coming weeks.

It will operate in a similar way to EFG and be provided by the British Business Bank, but will offer more attractive terms for both businesses and lenders, with the aim of supporting the continued provision of finance to UK businesses during the Covid-19 outbreak.

As well as loans, there are many other types of finance supported by the programme, depending on the provider. You can find out what type of finance they provide on our partner page.

Disclaimer: We are in the process of defining and agreeing the scheme’s details, specifications and eligibility and therefore information is subject to change. We will be updating our webpages to reflect any potential changes to CBILS as and when they are published.

Webpages will be updated over the coming days to provide more information.

The British Business Bank’s CBILS facilitates business finance to smaller businesses that are viable but unable to obtain finance due to having insufficient security to meet the lender’s normal requirements. The borrower always remains 100% liable for the debt.

In this situation, CBILS provides the lender with a government-backed 80% guarantee against the outstanding facility balance, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’.

CBils SUPPORTS A WIDE RANGE OF BUSINESS FINANCE PRODUCTS, INCLUDING:

  • Term facilities
  • Overdrafts
  • Invoice finance facilities
  • Asset finance facilities

To be eligible for support via CBILS, the small business must:

  • Be UK based, with turnover of no more than £41 million per annum
  • Operate within an eligible industrial sector (a small number of industrial sectors are not eligible for support – see below)
  • Have a sound borrowing proposal, but insufficient security to meet a lender’s normal requirements
  • Be able to confirm that they have not received de minimis State aid beyond €200,000 equivalent over the current and previous two fiscal years

An accredited lender can use CBILS to help a borrower access from £1,000 to £1.2 million. Finance terms are from three months up to ten years for term loans and asset finance and up to three years for revolving facilities and invoice finance.

To apply for an CBILS-backed facility, businesses may wish to consider approaching one or more participating lenders to discuss their borrowing needs.

Eligibility restrictions

Please note that a limited number of further eligibility restrictions do apply. Full details can be found here.

Almost all business sectors are eligible, however there are a small number of excluded/restricted sectors arising primarily from EU de minimis-State aid rules.