Updated 3rd November 2020

After the announcement of the 2nd lockdown last week, the deadline for the all of the governments’ Coronavirus Business Schemes has been extended again.

The CBILS scheme, initially planned to last for six months will now end on January 31 in 2021, along with the allowing businesses more time to access facilities of up to £5m with government-backed guarantees of up to 80%.

Operated by the British Business Bank (BBB), there are over 40 accredited lenders on the CBILS panel, ranging from high street banks to specialists.

What are the terms of a CBILS loan?

Originally, the maximum amount provided under a CBILS facility is £5m with repayments made over terms of up to six years. 

This has now been extended to ten years.

Is my business eligible?

To be able to apply for the scheme, you must be based in the UK and have an annual turnover of less than £45 million.

You can still apply if you are a sole trader or freelancer, as long as your business activity is operated through a business account.

Importantly, you must also be in a position where, were it not for the COVID-19 pandemic, you would have been considered a viable candidate for funding from your lender.

You will also need to demonstrate that the CBILS will allow you to trade out of any short or medium-term difficulty.

Are there fees involved?

Under the ‘Pay As You Grow’ scheme, the loans are interest-free for 12 months and the government will also pay any lender fees, meaning no upfront costs are paid.

If your business is struggling to make repayments due to the 2nd wave of COVID-19, depending on your funder, you can opt to make interest-only payments or six month payment holidays can be arranged with no affect on credit ratings. 

What’s the process of applying?

You don’t apply directly to the British Business Bank.

In the first instance, speak to your bank to see if they are on the panel. If they are, you will need to apply through them, and with phone lines so busy at the moment, it’s advised that you apply online rather than calling them.

Your bank/lender will make a decision using the parameters outlined above and if it’s decided that you can access finance without using the scheme, they will go down that route instead.]

If they’re not on the panel, we can help with the process.

What if a business already has a Bounce Back Loan (BBLS)?

If you have already received funds from the BBLS programme, but it’s less than 25% of your turnover (up to a maximum of £50,000), you could also still apply if you need additional cash.

When can I apply for a top-up?

Businesses will be able to request a top-up next week – though they can only apply once.

The government-backed 80% guarantee is for the lender, not you/the borrower, and you will remain will remain liable for the debt.

Depending on the lender being used, the scheme may be used for up to £250,000.

If a business wishes to obtain more than £250,000 of funding, the funder will generally look for security to support the request.

Are there alternative routes to finance?

It may take a while for help via the scheme to be approved or paid out via the banks.

So, if you’re looking for a more immediate cash injection, we can look to provide you with an unsecured loan or look to release cash by refinancing your assets or raising cash against unencumbered assets.

You can contact us to chat through your financial situation on 0115 958 6872, email info@midlandsassetfinance.co.uk or fill an enquiry form here.

Our team is standing by to help businesses during this difficult time and are here to help you and take the strain off so you can focus on running your business.