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CBILS extended until 31st March 2021

Updated: Nov 10, 2021

British Business Bank

As of 17th December 2020, the Government has announced plans to extend the Coronavirus Business Interruption Loan Scheme (CBILS) up until 31st March 2021. So what does this mean for Small & Medium Enterprises (SMEs) across the UK?

The great news for UK SMEs is that they now have another 3 months to get their applications in with banks and alternative lenders for a line of credit whereby they pay no interest for the first 12 months. The entirety of the interest is offset by the Government during this period, and the British Business Bank has been providing this to many businesses via their accredited lenders.

SMEs can receive multiple facilities with different lenders up to a value of £5 million. The size of each facility will be determined by each accredited lender, and requirements can vary. Lenders will not take a guarantee for facilities of under £250,000, but after that it’s up to the discretion of their risk team. For some lenders, a personal guarantee above £250,000 may be required. There are however many lenders who offer much larger unsecured facilities.

The following conditions must be met first before making an application:

  • Business must operate within the UK

  • Annual turnover of £45 million or less

  • Must have been affected by Covid-19 (examples could include a downturn in revenue, furloughed staff, profit margins affected by increasing costs)

  • Must not be classed as a ‘business in difficulty’ before the pandemic

What facilities are available through CBILS?

There are a number of different facilities available, with the most commonly known being a term loan which has a repayment schedule of anything up to 6 years. Importantly though, there are various lenders offering Trade Finance and Invoice Finance facilities that operate under CBILS, which provide a shorter term growth solution designed to both protect and stimulate businesses going forwards into 2021.

What if you were rejected by your bank?

It’s crucial to know that just because your bank rejected you, this doesn’t mean that an alternative lender won’t provide you with CBILS finance. It’s all down to the risk profile of each institution, and whether your company falls within their bracket, so don’t be offput by a rejection, as looking past this may lead you to a provider with a better offer.

What if you don’t need to use a facility anytime soon?

With many providers there is no obligation to use your facility straight away, and so if you think one may be of use in the future, it’s worth getting it set up now because the 12 month period whereby the Government will cover all interest won’t actually begin until you first draw down from your facility. Get in touch with us today to find information on which lenders it may be worth your time looking into.

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