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The Coronavirus Business Interruption Loan Scheme

What is the “Coronavirus Business Interruption Loan Scheme”?

The Coronavirus Business Interruption Loan Scheme (CBILS) is a state aid provided by the UK government to assist small and medium sized businesses (SMEs) during the coronavirus pandemic.

This will allow businesses affected by the Coronavirus pandemic to access loans, overdraft facilities, invoice finance and asset finance of up to £5 million over a period of time up to six years.

The government have confirmed that they will make a Business Interruption Payment that will cover the first 12 months’ worth of interest and any fees levied by the lender.  It has also just been announced that the government will provide lenders with a 100% guarantee on each loan to provide them with confidence.

Although the scheme is backed by the government-owned British Business Bank there are now 68 accredited lenders.  There is a diverse range of lenders including high street banks, challenger banks, asset-based lenders and smaller specialised local lenders.  A list of the accredited lenders can be found on the following link which allows you to filter the various lenders to establish which is the most appropriate for your needs:

Accredited Lenders

How do I qualify (and who is eligible)?

The scheme will support small and medium sized businesses (see definition below) which:

  1. Is UK based in its business activity, and
  2. Has an annual turnover of up to £45 million, and
  3. Has a borrowing proposal which the lender would consider viable, if not for the coronavirus pandemic, and
  4. Can self-certify that they have been adversely affected by the coronavirus (COVID-19), and
  5. Has not been classed as “in business difficulty” on 31 December 2019, if applying to borrow £30,000 or more.

The government have confirmed that banks, insurers, reinsurers, public sector bodies, further education establishments (if grant funded) and state funded primary and secondary schools cannot apply.

What will the lender require from you?

When you apply for a business interruption loan most lenders will ask for the following information:

a) Details of the loan including:

  • The amount you would like to borrow
  • The intention of the loan (i.e. what will the money be used for) in order to check that it is for a suitable business purpose
  • The repayment period, this will allow the lender to assess the affordability of the loan

b) Supporting information

What can Seymour Taylor do to help you?

The lender will require various pieces of supporting information which we can help you to either prepare or review on your behalf.  The additional supporting information they typically require alongside the details of the loan will include the following:

  • Management accounts
  • Cash flow forecast
  • Historical accounts
  • Business plan
  • Details of assets

So, if your business plan needs freshening or making more succinct, or your management accounts need a bit more detail or a more rigorous review our Outsourced Accounting Services Team will be more than willing to help you and your business toward surviving and starting to prosper once more.

This blog is for guidance only, professional advice should be obtained before acting on any information contained herein. The information was correct at time of publishing (19 May 2020).