Please note that as of 17 December, the Government has announced that the Coronavirus Business Interruption Loan Scheme (CBILS) will be extended until 31 March 2021.
CBILS provides financial support to smaller businesses (SMEs) across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak.
CBILS has been significantly expanded along with changes to the scheme’s features and eligibility criteria. The changes mean even more smaller businesses across the UK impacted by the coronavirus crisis can access the funding they need.
Importantly, access to the scheme has been opened up to those smaller businesses that would have previously met the requirements for a commercial facility but would not have been eligible for CBILS. Insufficient security is no longer a condition to access the scheme.
CBILS gives the lender a government-backed guarantee for the loan repayments to encourage more lending.
A lender can provide up to £5 million in the form of:
- term loans
- invoice finance
- asset finance
The borrower remains fully liable for the debt.
Under the scheme, personal guarantees of any form will not be taken for facilities below £250,000.
For facilities above £250,000, 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 CBILS-backed facility