In light of the government guidelines, all our offices are now closed and our teams are all working remotely, but are on hand to help you through these challenging times.
The CBILS was announced by the Chancellor in the budget and the scope was extended in subsequent announcements as part of a series of measures to support businesses affected by the ongoing impact of Covid-19. It can provide facilities (loans, overdrafts, invoice and asset finance) of up to £5m for smaller businesses across the UK who are experiencing lost or deferred revenues and disruption to their cash flow. The scheme launched on 23 March and is expected to operate for six months.
The scheme gives the lender (not the borrower) a government backed partial guarantee potentially enabling a business to access facilities which would otherwise not be available.
Unlike Enterprise Finance Guarantee scheme loans, there is no guarantee fee payable by the SME. The government will also cover any interest and lender levied fees in the first 12 months.
There are therefore no upfront costs to SMEs and reduced initial repayments (this may not apply in full for certain fishery, aquaculture and agriculture businesses).
SMEs from all sectors (excluding certain financial services and public sector organisations) can apply for the full amount of the facility up to a maximum of £5m.
The business must be:
The decision of what viable means is a credit decision for the individual lenders. In practice this is likely to be a combination of the performance of the business prior to the outbreak of Covid-19, the demonstrable impact the virus has had on the trading of the business (ie partial or total loss of revenue, supply chain interruption etc), the actions the business has taken to manage this impact and how the business will trade out of the current position with the support of the finance being requested.
The information required will vary by lender and product but as a minimum will include the following:
The list of participating lenders is available here and being updated as new lenders are accredited under the scheme: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business... If your existing bank or lender is on the list of accredited partners then they should be your first port of call. Understandably institutions are prioritising their existing customers when the volume of enquiries is expected to be incredibly high. Advice is to where possible make applications online as phone lines are likely to be extremely busy.
If you have a relationship manager or director they may have already been in touch. If you would like more information on the scheme, or to discuss your current funding arrangements please contact your AW contact, or a member of our Corporate Finance team.
Our specialist Commercial Funding Team, led by Steve Dinsmore, would be happy to assist you with any application you might wish to make under scheme or discuss alternative options in the event of a decline decision from your existing lender.