I have just received information on the Coronavirus Business Interruption Loan Scheme (CBILS) which has been introduced as a temporary measure by Government to support the continued provision of finance to UK SMEs during the COVID-19 outbreak.
The scheme is live from TODAY and members can find full details here
Stay safe, look after yourselves and each other,
Lucy
Lucy Reece-Raybould
BFA Chief Executive
British Business Bank
Coronavirus Business Interruption Loan
Scheme Stakeholder Briefing
Patrick Magee – Chief Commercial Officer
23 March 2020
www.british-business-bank.co.uk
@britishbbank 1
Agenda
1) What is the Coronavirus Business Interruption Loans Scheme (CBILS)
2) Key benefits of CBILS for SMEs
3) CBILS eligibility criteria
www.british-business-bank.co.uk
@britishbbank 2
The Coronavirus Business Interruption Loan Scheme
(CBILS) – what is it?
CBILS has been introduced as a temporary measure with the aim of
supporting the continued provision of finance to UK SMEs during the
COVID-19 outbreak. Timing: the scheme is live for SMEs as of today.
• It is a generous scheme designed to provide lenders with a
government-backed guarantee, potentially enabling a ‘no’ credit
decision from a lender to become a ‘yes’.
• CBILS is available to existing EFG accredited lenders and in due course
to newly accredited lenders.
• We intend to offer an expedited accreditation process for the CBILS
overdraft variant to allow for rapid alleviation of working capital issues.
• The government has announced that CBILS will be demand-led and will
be resourced accordingly.
www.british-business-bank.co.uk
@britishbbank 3
Key benefits of CBILS for SMEs (1/2)
✓ 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 governmentbacked, 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 small 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.
www.british-business-bank.co.uk
@britishbbank 4
Key benefits of CBILS for SMEs (2/2)
✓ 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.
www.british-business-bank.co.uk
@britishbbank 5
Fees and Interest for the SME
✓ The Government will make a Business Interruption Payment to
cover the first 12 months of interest payments and any lender-levied
fees.
✓ Smaller businesses will benefit from no upfront costs and lower initial
repayments.
✓ Following earlier discussions with the banking industry, some lenders
indicated that they would not charge arrangement fees or early
repayment charges to SMEs borrowing under the scheme. HM
Government greatly appreciates this approach by lenders.
www.british-business-bank.co.uk
@britishbbank 6
Viability: You must still establish that the SME borrower, or the SME borrower’s Group
has a viable business proposition assessed according to your normal commercial
lending criteria. However, where there are some concerns over the short-to-medium
term business performance due to the uncertainty and impact of Coronavirus (COVID19), provided you reasonably believe that (a) the finance will help the SME trade-out
of any short-to-medium term cashflow difficulty, and (b) if the facility is granted, the
SME should not go out of business in the short-to-medium term, then the proposition
may be considered eligible under the CBIL Scheme.
Lack of Security: For facilities over £250k, the CBIL Scheme still requires you to
establish a lack or absence of collateral prior to you using the CBIL Scheme. For
facilities of £250k and under, the CBIL Scheme may be used for unsecured lending at
the discretion of the lender. This is a departure from the EFG Scheme. To use the CBIL
Scheme in this way, you must confirm that the use of the CBIL Scheme has enabled
you to provide a facility to the applicant that you otherwise would not have been able
to provide.
Additional flexibility around industry sectors: such as haulage, agriculture,
fisheries and aqua-culture.
Additional lending which meets State aid requirements.
Eligibility for SMEs
www.british-business-bank.co.uk
@britishbbank 7
The scheme offers considerable flexibility for SMEs
• Viability: You must still establish that the SME borrower, or the SME
borrower’s Group has a viable business proposition assessed according
to your normal commercial lending criteria.
• Lack of Security: For facilities over £250k, the CBIL Scheme still
requires you to establish a lack or absence of collateral. For facilities of
£250k and under, the CBIL Scheme may be used for unsecured lending
at the discretion of the lender.
• Additional flexibility around industry sectors: such as haulage,
agriculture, fisheries and aqua-culture.
• Additional lending which meets State aid requirements.
Eligibility for SMEs
www.british-business-bank.co.uk
@britishbbank 8
• A British Business Bank paid media campaign promote CBILS (www.british-businessbank.co.uk/cbils)
• An ‘Economic Uncertainty Response’ update to the Business Finance Guide
• Start Up Loans offering support to customers affected by COVID-19
• UK Finance offering further support (www.ukfinance.org.uk/covid-19)
• Government Website offers information and support www.gov.uk/coronavirus
