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COVID-19 - an update

March 2020
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COVID-19 - an update

March 2020
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NEW – further details released regarding the government guaranteed loan scheme know as Coronavirus Business Interruption Loan Scheme (‘‘CBILS’’)


By: Matt Crawley Date: 23 March 2020
Category: Alert
Department: Business Development and Marketing

Further details have now been released regarding the detail behind CBILS. Below is a link to a useful FAQ helpsheet that has been prepared the British Business Bank.

https://www.british-business-bank.co.uk/wp-content/uploads/2020/03/British-Business-Bank-CBILS-FAQs-for-SMEs-FINAL.pdf



Key points to note:

• Borrowing proposal: A proposal will need to be provided to the lender to establish whether it is viable that the provision of finance will allow the business to trade out of the short to medium term difficulty

• Up to £5m facility: The maximum value of a facility provided under the scheme will be £5m, available on repayment terms of up to six years

• 80% guarantee: The scheme provides the lender with a government-backed, partial guarantee (80%) against the outstanding facility balance, subject to an overall cap per lender

• No guarantee fee for SMEs to access the scheme: No fee for smaller businesses. Lenders will pay a fee to access the scheme

• Interest and fees paid by Government for 12 months: The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will benefit from no upfront costs and lower initial repayments

• Finance terms: Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years

• Security: At the discretion of the lender, the scheme may be used for unsecured lending for facilities of £250,000 and under. For facilities above £250,000, the lender must establish a lack or absence of security prior to businesses using CBILS. If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so

• The borrower always remains 100% liable for the debt.

If you have any questions, please contact your usual Lovewell Blake contact.
 
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