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Updates to the Coronavirus Business Interruption Loan Scheme

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The Coronavirus Business Interruption Loan Scheme has been opened up to those smaller businesses who would have previously met the requirements for a commercial facility but would not have been eligible for the Coronavirus Business Interruption Loan Scheme (CBILS). This significantly increases the number of businesses eligible for the scheme.

The expanded scheme will be offered by lenders from Friday 3 April 2020 and operational from Monday 6 April 2020.

Updated scheme features

  • No personal guarantees for facilities under £250k: Personal guarantees of any form cannot be taken under the scheme for any facilities below £250k.
  • Personal guarantees for facilities above £250k: Personal guarantees may still be required, at a lender’s discretion, but recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied. A Principal Private Residence (PPR) cannot be taken as security to support a personal guarantee or as security for a CBIL backed facility.
  • Security: For all facilities, including those over £250,000, CBILS can now support lending to smaller businesses even where a lender considers there to be sufficient security, making more smaller businesses eligible to receive the business interruption payment.

These changes should be retrospectively applied by lenders for any CBILS facilities offered since 23 March 2020. For any commercial (non-CBILS) facilities offered since the same date, providing the borrower meets the CBILS eligibility criteria, lenders have been asked to bring these facilities onto CBILS wherever possible (e.g. where the lender is accredited to offer the same facility through CBILS) and changes retrospectively applied as necessary.

Updated eligibility criteria for smaller businesses

To be eligible for a facility under CBILS, a smaller business must:

  • Be UK based in its business activity, with turnover of no more than £45m per year.
  • Have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender.
  • Self-certify that it has been adversely impacted by the Coronavirus (COVID-19).

To view the online quick eligibility checklist for SMEs please click here https://www.british-business-bank.co.uk/wp-content/uploads/2020/04/CBILS-check-list-v10.pdf

To view full details including information on the supporting documents likely to be required please click here https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/for-businesses-and-advisors/

How to Apply

  1. FIND A LENDER – View and select a CBILS accredited lender
  2. APPROACH A LENDER – You should approach a lender yourself, ideally via the lender’s website.

Please note that a complete, regularly-updated page listing the full range of support available and other helpful information can be found on our website at https://www.cottonsaccountants.co.uk/support-for-those-affected-by-covid-19

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