Coronavirus Business Interruption Loan Scheme to start next week
20th March 2020
The British Business Bank has confirmed that it will administer the Government’s new Coronavirus Business Interruption Loan scheme (CBILS) to support small businesses in the UK, starting from Monday 23 March.
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 (including ours)
- 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
- Have a sound borrowing proposal, but insufficient security to meet a normal lender’s requirements.
The loan scheme aims to support the continued provision of finance to UK businesses during the Covid-19 outbreak.
It will support a wide range of business finance products, including:
- Term loans
- Overdrafts
- Invoice finance
- Asset finance
The Government will cover interest payments for the first 6 months. So businesses will benefit from lower initial repayments, although the business remains liable for repayments of the capital. The maximum value of a facility provided under the scheme will be £5 million pounds.
Finance terms are from three months up to 10 years for term loans and asset finance, and up to three years for revolving facilities and invoice finance.
What we don’t know yet is what the lending criteria will be, what the interest rate will be, what information will need to be provided in an application or how long the application process will take.
Further details will be announced here soon and will also be posted on the TRA website.
