Everything you need to know about the Coronavirus Business Interruption Loan Scheme

Last updated on

What is the Coronavirus Business Interruption Loan Scheme?

The Coronavirus Business Interruption Loan Scheme (CBILS) was introduced to provide capital to British companies that have been negatively impacted by the coronavirus pandemic. 

How much can a company receive from the Coronavirus Business Interruption Loan Scheme?

CBILS helps both small and medium-sized businesses to receive loans and other kinds of finance up to an amount of £5 million.

The government has agreed to provide 80% of the finance to the lender and will also pay interest and any fees for the first 12 months. 

Who is eligible to receive funds through the Coronavirus Business Interruption Loan Scheme?

There are several boxes to tick for a company to be eligible to receive funds for the CBILS. 

  • They must be either a limited company or have a partnership registered in the UK. 
  • They cannot be considered to have been an “undertaking in difficulty” as of 31 December 2019. This is according to the British Business Bank’s definition. 
  • They have to have been adversely affected by the coronavirus pandemic.
  • Must have a turnover of less than £45 million in 2019.

Who is unable to apply for the Coronavirus Business Interruption Loan Scheme?

Just about any business can apply; however, there are a few exceptions. Banks, insurers, reinsurers, public-sector bodies and state-funded schools are not eligible.

How long do the loans in the Coronavirus Business Interruption Loan Scheme last for?

This depends on the type of loan a business applies for. 

For overdrafts and invoice finance facilities, the loans last up to three years. For loans and asset finance facilities, the period is up to six years. 

Who can provide funds for Coronavirus Business Interruption Loan Scheme?

Only lenders that have been accredited by the British Business Bank can provide loans.

The British Business Bank has accredited companies such as Growth Lending. The full list of accredited banks can be found here

How can a company apply for the Coronavirus Business Interruption Loan Scheme?

A company should research which is the best provider for them and then approach the lender and inform them how much they’ll need, what they’ll use it for and how long it will take them to pay it back. 

What documents are required to apply for the Coronavirus Business Interruption Loan Scheme?

A company will need to provide documents that prove that they can afford to repay the loan. 

These may include:

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

Different lenders may ask for additional documents and the amount being asked for may dictate which documents are required. 

The lender will subsequently check to make sure that the loan is for legitimate purposes, affordable for the business and the right type of finance. 

What happens if an application for the Coronavirus Business Interruption Loan Scheme is rejected? 

Just because one provider rejects a company’s request, it doesn’t prevent them from going on to ask another of the accredited providers. 

Find out more about the accredited banks here

PayFit blog author

PayFit blog author

PayFit

You may also like...

Information on employee tax relief

The extension of the work from home tax relief scheme means that people working from home can apply for tax relief for both the previous and current tax year. 

Tax and NI relief on home-office expenses extension

The temporary exemption of Income Tax and National Insurance Contributions (NICs) for home-office expenses has been extended until the end of the 2021/22 tax year. 

SSP for shielders

From April 1st, individuals on the Shielded Patient List will no longer be eligible to receive either SSP or Employment and Support Allowance (ESA) purely on the basis of being instructed to shield.

Stay up to date with the latest payroll, HR & PayFit news...
PayFit