Coronavirus Business Interruption Loan Scheme Explained

24 March 2020

Author: Sinead McGrath
Practice Area: Banking & Finance, COVID-19

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The Coronavirus Business Interruption Loan Scheme (CBILS) is now available (from Monday 23 March 2020). The key features of the CBILS are set out below:

  • Up to £5m facility, available on repayment terms of up to 6 years
  • 80% guarantee against the outstanding facility balance (subject to lender specific caps, please speak to your own bank for more information)
  • Lenders will pay a fee to access the scheme, meaning no fee for SME’s
  • Interest and fees paid by Government for 12 months by way of a “Business Interruption Payment”, meaning no upfront costs and lower initial repayments for businesses.
  • Finance terms are up to 6 years for term loans and asset finance facilities and up to 3 years for overdrafts and invoice finance facilities.
  • At the discretion of the lender, the scheme may be used for unsecured lending for facilities of £250,000 and under. For facilities above £250,000, the lender must establish a lack or absence of security prior to businesses using CBILS. If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.
  • For the avoidance of doubt, the borrower always remains 100% liable for the debt.

The British Business Bank (BBB) which is administering the scheme has published further information on participating lenders, eligibility criteria and making an application on their website. This is available at the following link:

https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/

For further information contact Sinead McGrath, Head of Carson McDowell’s Banking team.

*This information is for guidance purposes only and does not constitute, nor should be regarded, as a substitute for taking legal advice that is tailored to your circumstances.

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