Coronavirus Business Interruption Loan Scheme (CBILS) FAQs

CBILS provides facilities of up to £5 million for smaller businesses across the UK that are impacted by Covid-19. CBILS supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance facilities.

Note: This scheme is just one of a number of measures announced by Government. You can find full details of measures to support public services people and businesses through this period of disruption caused by coronavirus.

CBILS guarantees facilities up to a maximum of £5 million, are available on repayment terms up to six years (for term loans and asset finance) and up to three years (for overdrafts and invoice finance facilities). A term extension beyond these limits, up to a maximum of 10 years for existing CBILS facilities can be made in connection with the provision of forbearance relating to the facility, at the discretion of the lender if within its usual forbearance policies.

The scheme provides the lender with a government-backed guarantee against the outstanding balance of the facility. The business remains 100% liable for repayment of the facility.

There is no guarantee fee for SMEs to access the scheme. The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees. Fishery, aquaculture and agriculture businesses may not qualify for the full interest and fee payment. You (the SME) will therefore benefit from no upfront costs and lower initial repayments. Following earlier discussions with the banking industry, some lenders indicated that they would not charge arrangement fees or early repayment charges to SMEs borrowing under the scheme. HM Government greatly appreciates this approach by lenders.

CBILS supports a wide range of business finance facilities, including:

• term loans
• overdrafts
• asset finance
• invoice finance

Note: Not every lender can provide every type of finance listed. CBILS is available through the British Business Bank’s accredited lenders, which are listed on the British Business Bank website.

Smaller businesses (SMEs) from all sectors ^{Read footnote text 4}  can apply for the full amount of the facility, up to a maximum of £5 million. To be eligible for a facility under CBILS, your business must meet the eligibility criteria for the Scheme, which includes:

• be UK-based in its business activity;
• have an annual turnover of no more than £45 million;
• have a borrowing proposal which the lender would consider viable, were it not for the current pandemic;
• self-certify that it has been impacted by the coronavirus (COVID-19); and
• not be classed as a business or ‘undertaking’ in difficulty.

Importantly, access to the scheme is open to smaller businesses that previously would not have been eligible for CBILS because they met the requirements for a standard commercial facility. You may therefore consider re-contacting your lender if you have previously been unsuccessful in securing funding.

• ^{Return to footnote location 4}

  The following trades and organisations are not eligible to apply: Banks, insurers and reinsurers (but not insurance brokers); public-sector bodies and state-funded primary and secondary schools.

CBILS is available through the British Business Bank’s accredited lenders, which are listed on the British Business Bank website.

In the first instance, you should approach your own provider – ideally via the lender’s website. You may also consider approaching other lenders if you are unable to access the finance you need.

Decision-making on whether you are eligible for CBILS is fully delegated to the accredited CBILS lenders. These lenders range from high-street banks and challenger banks to asset-based lenders and smaller specialist local lenders.

Note: Potential applicants should consider applying via the lender’s website in the first instance – telephone lines are likely to be busy and branches may have limited capacity to handle enquiries due to social distancing.

CBILS closed for new applications on 31 March 2021.

You will need to provide certain documents when you apply for a CBILS-backed facility. These requirements vary from lender to lender, but are likely to include:

• Management accounts
• Business plan
• Historic accounts
• Details of business assets

If you do not have everything listed here, a CBILS loan could still be an option to provide finance to support your business.

Note: For many customers approaching their existing lenders for a smaller facility, the process may be automated and therefore may not require the same level of documentation.

There is no guarantee fee for SMEs to use CBILS. Interest and lender levied fees will be met by the Government for the first 12 months after drawdown of your facility via a Business Interruption Payment (BIP).

Interest rates will vary between lenders and will depend on the specific lending proposal. Please speak to your lender, who will be able to give you full details on what interest rates will be payable by you after the BIP has concluded.

Yes. You must show in your borrowing proposal that were it not for the current pandemic, the lender would consider your business viable.

You must also self-certify that your business has been impacted by the coronavirus outbreak.

Under the scheme, lenders will not take personal guarantees of any form for facilities below £250,000.

For facilities above £250,000, personal guarantees may still be required, at a lender’s discretion, but:

• they exclude the Principal Private Residence (PPR); and
• 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

For all facilities, including those over £250,000, CBILS supports lending to smaller businesses even where a lender considers there to be sufficient security. Where there is sufficient security available, it is likely that the lender will take such security in support of a CBILS facility.

A borrower’s/guarantor’s Principal Private Residence (PPR) cannot be taken as security to support a personal guarantee or as security for a CBILS-backed facility (but a lender may wish to do so to support a commercial facility alongside the CBILS-backed facility).

For CBILS facilities below £250,000, personal guarantees cannot be taken by lenders in relation to the facility under the Scheme.

For CBILS facilities above £250,000, personal guarantees may still be required, at a lender’s discretion, but they exclude the Principal Private Residence (PPR) and 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 worked example to show what this change will mean in practice:

• £1 million facility
• Business pays off £400,000, then defaults, owing £600,000
• Lender recovers £100,000 from other business assets secured, such as a debenture (e.g. stock), leaving £500,000 outstanding
• Call on personal guarantee is £100,000 (20% – not the full £500,000 as previously), leaving £400,000 as a loss
• Government covers £320,000, lender loses £80,000

CBILS is open to all eligible borrowers – your business does not need to be an existing customer of the lender you are approaching.

You can, in certain circumstances, use a CBILS facility to refinance existing debt. For example, where you are seeking to put your business on a more stable financial footing and/or improve your working capital position, then, in principle, a CBILS facility could be provided, providing you fulfil the eligibility criteria for the Scheme.

Refinancing can be undertaken with or without an increase in the original borrowing. Any refinancing will be treated as a new facility and the application will need to meet the eligibility criteria for a CBILS facility.