Posted: Mon, 23 Mar 2020 11:54
Delivered by the British Business Bank, through 40+ accredited lenders and partners, the Coronavirus Business Interruption Loan Scheme will support the continued provision of finance to UK smaller businesses (SMEs) during the Covid-19 outbreak.
Although the Budget announced that an initial £1.2bn of government-backed lending would be available through the new scheme, the government has since announced that it will be demand-led and will be resourced accordingly.
The Coronavirus Business Interruption Loan Scheme supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance facilities. The scheme provides the lender with a government-backed guarantee, potentially enabling a 'no' credit decision from a lender to become a 'yes'.
• 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 fees1, so smaller businesses will benefit from no upfront costs and lower initial repayments.2 • 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.
Further details can be found at https://www.british-business-bank.co.uk/new-coronavirus-business-interruption-loan-scheme-opens-to-smaller-businesses-across-the-uk/
British Business Bank for East and South East Midlands is:
Senior Manager, UK Network – East & South-East Midlands
m +44 (0)7810 054 221
t +44 (0)114 206 2131
Steel City House | West Street | Sheffield | S1 2GQ
t +44(0) 114 206 2131 | w www.british-business-bank.co.uk