Coronavirus Business Interruption Loan Scheme (CBILS) Update: Expansion

In response to feedback from the business community, the Chancellor, Rishi Sunak, has announced an expansion of the Coronavirus Business Interruption Loan Scheme (CBILS) that will be effective from 6 April 2020. The scheme’s features and eligibility criteria have been expanded to enable small businesses to access available funding.

The purpose of the scheme is to provide facilities of up to £5m to UK SMEs who are experiencing disruption to their cashflow as a result of the global pandemic. The scheme was initially only available to businesses who had been unable to secure regular commercial funding in the first instance before being eligible to apply directly for a CBILS loan.

Additionally, those applying for loans over £250,000 had to demonstrate a lack of security prior to the business using the CBILS. As of 6 April, these requirements will be abandoned and smaller businesses which previously might only have been able to obtain a commercial loan will be able to apply to the CBILS immediately.

This expansion coincides with the British Business Bank’s, the scheme coordinators, prohibition on lenders seeking personal guarantees from directors for loans under £250,000. Personal guarantees may be sought for loans above £250,000, however, security packages will be decided on a case-by-case basis. You can find more information on this here.

The new measures are to be implemented from 6 April and will be applied retrospectively by the 40+ British Business Bank Accredited Lenders.

As of 3 April 2020, around £90 million of CBILS loans had been approved for almost 1,000 businesses. More information about the CBILS and the recent expansion can be found on the British Business Bank’s website.

For further information on eligibility or the consequences of giving security over your business assets, please do not hesitate to get in touch with a member of our team.

This article was co-written by Calum Lavery.

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