Revised Coronavirus Business Interruption Loan Scheme (CBILS)

The funding is based on:

  • A maximum of 25% of 2019 annual turnover, or
  • Double the Annual wage bill

The criteria’s based on trading, and the loans will be approved in situations where the banks would normally have lent, subject to standard lending criteria.

The loan term is based over a maximum of 6 years, with the first 12 months interest free.

Security

The government will provide a guarantee of 80% of the loan and for any borrowings under £250,000 the bank will not ask for a personal guarantee. For any borrowings over this amount, the bank may require a personal guarantee but will not take a charge over the main residence and is capped at 20% of the outstanding liabilities.

Information required by the banks

Whilst this is subject to each individual bank, the majority of banks appear to be asking for:

  • Last 3 years accounts
  • Any management accounts (Barclays specifically ask for the last quarter of 2019)
  • Any supporting information that you feel appropriate
  • Some banks are asking for cash flow forecasts too (ranging from 13 week forecasts to 12 month forecasts)

Other information that will be required:

  • What the purpose of the loan will be specifically used for
  • How the funds will be used to address the cash shortfall caused by COVID 19
  • How the amount required has been derived (cash flow forecasts will support this)
  • What other government schemes you have accessed and the amounts involved
  • How the loan will support the longevity of the business
  • When the pandemic is resolved, how long do you believe it will take to start recovery and what challenges you will face
  • What changes are you making to your business moving forward?

Existing Loans/Asset finance – Capital Repayment Holidays

A lot of banks are offering capital repayment holidays of up to 12 months. This may mean that you will still have to pay interest, but we recommend you contact the bank.

Invoice Discounting Facilities/ Factoring Facilities

We believe that many facilities are being very flexible, such as extending facilities to 200 days, and also increasing the prepayment to 100%.

We recommend that you contact your bank directly to confirm the information that they require (as based on your criteria you may not need to provide cash flow forecasts). Once you have this, please then get in touch with us so that we can assist with providing the business pack to give to the bank.

To also help you with this process we have prepared a helpful infographic, which can be downloaded and shared.

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Posted in COVID-19, COVID-19 - Grants, Loans, Reliefs & Deferrals, Covid-19- CBILS.