The Coronavirus Business Interruption Loan Scheme (CBILS) is currently set to close for applications at the end of September 2020.

Whilst formal Government announcements are still to materialise, it is our understanding that the Scheme will close for applications this month – and that Banks are working upon the understanding that they will need to have their credit function approve the application before the 30th September 2020 for the Scheme to be accepted by Government for funding.

Please refer to our previous posts concerning the Scheme should you wish to research your potential to benefit from the Scheme, or alternatively follow this link: https://www.gov.uk/guidance/apply-for-the-coronavirus-business-interruption-loan-scheme

 

  1. What is the Coronavirus Business Interruption Loan Scheme (CBILS)?
  • CBILS is a scheme that can provide facilities of up to £5m for smaller businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cashflow;
  • CBILS supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance;
  • The scheme provides the lender with a government-backed guarantee potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’.
  • The borrower always remains 100% liable for the debt.

 

  1. Should I Make An Application Before The Scheme Runs Out?
  • You really do need to consider how the Pandemic has, and still might, affect your business
  • For instance,
    • the Job Retention Scheme ceases at the end of October;
    • there may well be further challenges arising for us all in terms of a second wave or for your industry or business in particular
  • You should consult your current trading patterns and cash projections
    • You really do need to have a minimum rolling 90 day cash forecast in place to review immediate cash needs;
    • Have you (for instance) taken into account that as your turnover builds, your cash may deplete as often customer credit stretches beyond the need to pay employees, key suppliers and day to day running costs – the business could be moving toward recovery yet run out of cash!
    • You must understand how your cash outgoings are to be managed and controlled for whatever duration this Pandemic may impact upon your business, and remember we may well be headed for a long and stressful winter as the economic recession takes its full impact upon demand.

 

  1. What If I have Already Received a Bounce Back Loan (BBL)? 
  • You can still apply for a CBIL Loan;
  • You would need to settle the BBL Loan out of the funds generated from the CIBL.

 

  1. Is The Bounce Back Loan (BBL) Closing Too?
  • You can still apply for a BBL Loan until 4th November 2020 currently.

 

  1. Am I Eligible?
  • Smaller businesses (“SME”) from most sectors can apply for the facility;
  • Your business needs to be
    • UK-based in its business activity;
    • Operate with annual turnover of no more than £45m;
  • You need to be able to demonstrate a viable Borrowing Proposal
    • You must show in your borrowing proposal that were it not for the COVID-19 pandemic, your business would be considered viable by the lender, and for which the lender believes the provision of finance will enable your business to trade out of any short-to-medium term difficulty;

 

  1. Need Help To Review Your Cash Position?
  • Please contact us urgently – time is incredibly tight;
  • We have a dedicated team focussed upon Scheme eligibility and the application process led by jasonm@barrons-bds.com

Barrons has put together a helpful guide to running your business during the coronavirus crisis.