COVID-19: The Coronavirus Business Interruption Loan Scheme

Businesses are confused about how they can gain access to The Coronavirus Business Interruption Loan Scheme ...

After all, Business secretary Alok Sharma (he's a qualified accountant by the way!) spoke last week at one of the Downing Street COVID-19 briefings saying, "It would be completely unacceptable if any banks were unfairly refusing funds to good businesses in financial difficulty.

Just as the taxpayer stepped in to help the banks in 2008, we will do everything we can to help the banks repay that favour and support the businesses and people of the UK in their time of need."

So, who is eligible? According to the British Business Bank eligibility checklist, to qualify for CBILS businesses:

- Your application must be for business purposes and the business must have been adversely impacted by the Coronavirus (COVID-19)
- You must be a UK-based SME with an annual turnover of up to £45m
- Your business must generate more than 50% of its turnover from trading activity
- Your CBILS-backed facility will be used to support primarily trading in the UK
- You wish to borrow up to a maximum of £5m. (Finance terms are to six years for term loans and asset finance. For overdrafts and invoice finance facilities, terms will be up to three years)

The following are exempt:

- Banks and building societies
- Insurers and reinsurers (but not insurance brokers)
- Public-sector organisations, including state-funded primary and secondary schools
- Employer, professional, religious or political membership organisations
- Trade unions

There has been a lot of controversy with the banks asking for personal guarantees so it has now been confirmed that borrowers do not have to explore other commercial sources of finance first before seeking a business interruption loan.

"Personal guarantees have been waived for loans under £250,000!"

A lender can still turn down your application, so under these circumstances, I suggest you try another lender (there are 40 Coronavirus Business Interruption Loan Scheme accredited lenders ) or contact us for an introduction to a bank broker.

If you feel inspired to find out more about anything I've said here, do call me on 01908 774320 or leave a comment below and I'll be in touch as soon as I can.