CBILS- an initiative to help businesses deal with the impact of Corona virus

There has been a lot going on due the corona virus.   Not only has it gripped the entire world, but has also impacted the businesses to a great extent.  The escalating corona virus pandemic has been putting enormous pressure on businesses, who are deeply concerned about the day to day cash flows and liquidity. In such a critical situation, it has become essential for businesses to look for a small business loan in UK to deal with the finance issues. So, the UK government has come up with a scheme- Corona virus Business Interruption Loan Scheme, commonly known as CBILS to help businesses who are facing the impact of this pandemic. Also, a business campaign has been launched to make businesses aware of the support available.

All about Corona virus Business Interruption Loan Scheme

The scheme has finally been launched in UK on 23 March 2020. The scheme has been launched with the purpose of supporting small and medium businesses by providing them a continued provision of finance. Smaller business in UK, who have been facing lost revenues, disruptions in cash flows will be provided facilities under CBILS.

The CBILS include wide range of products such as Overdrafts, term loans, invoice discount facilities, and asset finance facilities. The scheme is backed by the government and will provide loans to small and medium businesses of up to £ 5 million. The government shall cover the interest payments and lender levied fees for a period of 12 months. However, the businesses shall remain liable for the payment of the capital.

This scheme will replace the existing Enterprise Finance Guarantee Scheme (EFGS) and shall operate in a similar manner. The scheme provides the lenders a government backed guarantee for providing funds to eligible businesses.


Key features of CBILS

The scheme offers attractive terms for both businesses as well as lenders. The key features of this Coronavirus Business Interruption Scheme are:

  • Facility of up to £5 million- The maximum amount of the facility that can be availed under this scheme is £5 million, which shall be repaid within six years.
  • 80% guarantee on each loan- The scheme provides the lenders a guarantee of 80% on each loan. However, such guarantee is subject to overall cap per lender.
  • Interest payments and fees paid by government- The government will cover interest payments or lender levied fees for a period of 12 months. This will benefit the SMEs from lower repayments and no upfront costs.
  • Finance terms- For term loans and asset finance facilities, the terms of finance shall be six years. However, for overdrafts and invoice discounting facilities, the term shall be three years.


Who can apply for the scheme

To apply for Coronavirus Business Interruption Scheme, the small and medium enterprises need to meet the following criteria:

  • The businesses should be UK based and should have a turnover of £45 m per annum.
  • The business must operate within the eligible industrial sector.
  • The businesses should have a borrowing proposal, which would be considered viable, if the lender believes that the provision of finance will help businesses to come out of the difficulty.
  • Also, the businesses must be able to confirm that they have not received any state aid equivalent to EUR 200000 in the past three years.
  • The growing businesses shall not be subject to CBILS even if they are helping to combat coronavirus pandemic.


Source your finance

 The current situation is quite fast moving. So, it’s better to take full advantage of CBILS if you want to come out from the difficult time. It’s a sort of small business loan in UK that can provide you a provision of finance to deal with the disrupting cash flows and lost revenues.



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