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Corona-Virus Business Interruption Loans – CBILS

The British Business Bank (BBB) backed loan scheme ends at the end of this month with a lot of businesses taking advantage of the scheme and managing to keep trading.

What are CBILS?

The BBB has accredited over 90 lenders from high street banks, challenger banks to specialist lenders. They can provide a business with a facility from £50,000 up to £5 million as a term loan, overdraft invoice finance or asset finance.

The criteria from the BBB seemed quite simple, to be eligible a business must:

  • 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 adversely impacted by the coronavirus (COVID-19)
  • Not have been classed as a “business in difficulty” on 31 December 2019, if applying to borrow £30,000 or more

How Have Clients Reacted to CBILS?

Overall, the government was praised for the scheme and getting this out to funders at speed, however the information was vague in parts and mixed messages were received when different questions were asked. Getting this facility out to market was a massive undertaking and a few issues and grey areas were always going to happen.

Although the criteria above appeared straightforward, this was not the case. We had reports of eligible customers being turned down and waiting weeks for a response. Modelling lending criteria around the business position in December 2019 has meant paying money to closed or struggling businesses. This is unchartered territory for most funders, previously having to forgo their rigorous checks on payback eligibility; After spending years making sure a business taking a facility can pay it back, it was a drastic change of mindset. It is understandable, on a personal level you would have reservations about lending money to someone who had no income and no current plan of how to pay it back.

What Else Are We Seeing From The Market?

Many Customers came to us very frustrated with their own bank, the large number of applications and the interpretation of the BBB’s criteria has made for a confusing process in this already difficult time. As more funders have been approved the speed and most importantly communication has improved drastically.

This meant different funders acted and responded differently, some had excellent appetites for certain sectors whilst others would only finance certain equipment or look at specialist facilities. Similarly, the BBB states that ‘For facilities above £250,000, personal guarantees may still be required, at a lender’s discretion’. Lenders discretion is one of the many reasons we have a multitude of bespoke offerings and tailored solutions from funders.

The next option may be to consider an alternative finance provider; These funders can act with speed and experience. This may be a more attractive option for business owners who are keen to source funding efficiently and focus on the day to day running of their business.   

What can you do?

At Business Finance House, we understand your business and what is the best option for you. We also understand that you have a business to run and want to focus on that. By calling 01244 506335 you can speak to one of our experts and we can see what is the best route for you and your business.

As well as call 01244 506335 You can also E-Mail

For more information on CBILS you can also visit the British Business Bank.

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