Monday, 27th April 2020
As announced by the Government, one of the measures put in place to help small businesses is the option of the Coronavirus Business Interruption Loan Scheme (CBILS).
Guidance surrounding the loans continues to evolve, however the facts so far are noted below.
The CBILS is a Loan Guarantee, with the Government providing the bank or lender with an 80% Guarantee of any money provided to the applicant.
Personal Guarantees will be required for 20% of the loan for loans over £250,000, private residence cannot be used as security.
Where the total borrowing is below £250,000 the lender is not allowed to request a Personal Guarantee.
The CBILS is not risk free to the bank but they are likely to be supportive where they can be.
What are the key criteria?
- Applies to businesses with less than £45m turnover
- All businesses affected by Covid-19 are eligible except banks insurance and public sector businesses, only a very few exceptions
- Required to have a sound borrowing proposal
- Loan amount – £1,000 to £5,000,000
- Term – Up to 6 years
- Interest – Interest free for the first 12 months followed by sensible low rates
- Capital repayment holiday (at lenders discretion 12 months on offer from several)
- Fees – No arrangement fees are being levied
- Available through 40 lenders including the high street banks
- Administered by the British Business Bank
- These are being made available from 23 March 2020 initially for six months
How can Onyx help?
We would strongly recommend speaking to your bank first to understand all options available to you.
If you would like us involved, then we will support you during your bank meeting and throughout the application process.
Are your accounts and management information up to date? If not then we can help to bring your accounting affairs up to date.
You will need up to date year end accounts and management accounts in order to ensure your application is processed swiftly taking advantage of this measure.
We can prepare cashflows to show how the extra funding will be used and the forecasts for repayment.
Visit our previous articles to access other funding options.
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