Coronavirus Business Interruption Loan Scheme (CBILS) – Funds are now coming through
The Coronavirus Business Interruption Loan Scheme (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 gives the lender a government-backed guarantee for the loan repayments to encourage more lending, however 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 and possibly not for large sums either.
CBILS has been significantly expanded in the past few weeks along with changes to the scheme’s features and eligibility criteria. A lender can provide up to £5 million in the form of term loans, overdrafts, invoice finance and asset finance – We have seen significant seven figure loans arriving in clients bank accounts this week, along with smaller amounts so the banks are certainly keen to get them in place.
You should probably work to a lead time to get CBILS funding in place of four weeks – It generally takes two weeks for clients to gather the required information and then another two weeks for lenders to get the funds in place.
If you are thinking about applying for CBILS funding in order to support your business through the COVID-19 pandemic, think about preparing the following information:
- How much are you requesting and why? Explain how you have calculated the amount and in what area of your business COVID 19 has impacted.
- On what basis has the amount been calculated? Has this been based on pre virus income and expenditure levels or expected future levels?
- When the pandemic is over, how long do you think it will take your business to recover? What challenges do you expect to face?
- What changes are the business making in the short and long term to help drive business performance?
- What are the costs you currently have to pay and what are you doing to reduce these?
- Prepare the following documentation:
- Latest available (and draft) 1 year unabbreviated filed accounts
- Latest 6 months bank statements
- Latest management accounts / information if available
- Latest 4 quarter VAT returns