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The Coronavirus Business Interruption Loan Scheme

The Coronavirus Business Interruption Loan Scheme

The Coronavirus Business Interruption Loan (CIBLS) Scheme to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance.


UPDATE April 2nd: Rishi Sunak is expected to announce in the coming days that a key feature of the Coronavirus Business Interruption Loan Scheme - 'the requirement for banks to first assess whether SMEs are eligible for their other lending options' - will be removed.

An announcement is possible as soon as Friday, according to sources.

  • The move is aimed at increasing the speed of decision-making within the high street banks. Under the revamped programme, any viable business with a turnover of up to £45m will be able to access the scheme, which is interest-free and fee-free for the first 12 months.
  • A key criteria is the ability of businesses to demonstrate that their company was viable going into the crisis, and that they have the ability to repay the loan at the end of the term.
  • Personal guarantees taken on loans above £250,000 will be used to cover the 20% of the loan that the government is not underwriting, according to one official.


Coronavirus Business Interruption Loan Scheme

  • Temporary Coronavirus Business Interruption Loan Scheme, delivered by British Business Bank, will support businesses to access bank lending and overdrafts


  • The Big Four banks have agreed that they will not take personal guarantees as security for lending below £250,000


  • Government will provide lenders with a partial guarantee of 80% on each loan to give lenders confidence in continuing to provide finance to SMEs

- There is no guarantee fee for SMEs to access the scheme

- The government-backed partial guarantee (80%) against the outstanding facility balance

- Some lenders indicated that they would not charge arrangement fees or early repayment charges to SMEs - so check with your lender

- The Government will make a 'Business Interruption Payment' to cover the first 12 months of interest payments and any lender-levied fees (Which means businesses will therefore benefit from no upfront costs and lower initial repayments)


  • The Government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5m in value

- Available on repayment terms up to six years for term loans and asset finance

- Overdrafts and invoice finance facilities, terms will be up to three years


  • Business remain responsible for repaying any facility they take out

Please note: It’s important that you are aware that you, the borrower will always remain 100% liable for the debt. The CIBLS guarantee is to the lender, not you, the SME



Quick Eligibility Checklist for SMEs


1. Your application must be for business purposes

2. You must be a UK-based SME with annual turnover of up to £45m

3. Your business must generate more than 50% of its turnover from trading activity

4. Your CBILS-backed facility will be used to support primarily trading in the UK

5. You wish to borrow up to a maximum of £5m. (Finance terms are to six years for term loans and asset finance. For overdrafts and invoice finance facilities, terms will be up to three years)


Note: Smaller businesses from all sectors can apply for the full amount of the facility**. Full details can be found by following the link below


**The following trades and organisations are not eligible to apply: Banks, Building Societies, Insurers and Reinsurers (but not insurance brokers); The public sector including state funded primary and secondary schools; Employer, professional, religious or political membership organisation or trade unions.


Date available: 23 March 2020

Application process:  Your business bank/lender or one of the accredited CBILS lenders

This scheme is offered by more than 40 lenders including the big four banks — Barclays, HSBC, Lloyds and RBS  — provide funds under the scheme as either loans, overdrafts or asset-based lending secured on equipment or invoices, to deliver the loan scheme within a matter of weeks to support your business in this difficult time.

The government will provide lenders with a guarantee of 80 per cent of each loan to assist with approving credit decisions for small businesses that have insufficient security to meet the lender’s normal requirements. (subject to a per-lender cap on the number of bad loans it can claim for) This is providing the lenders with more confidence and flexible decision-making process which will increase the amount of loan application being accepted.

The scheme will support loans of up to £1.2m per small business. This new guarantee, which replaces the existing £500m Enterprise Finance Guarantee (EFG), will initially support up to £1.2bn of lending.

The Coronavirus Business Interruption Loan will offer more attractive terms for both small business and lenders than the EFG.

Lenders will not charge small businesses or banks for this guarantee. And the government will waive the 2 per cent it charges borrowers annually for the EFG guarantee.


Author of this COVID-19 Business Support Hub Article

East Midland Chamber Derbyshire, Nottinghamshire, Leicestershire

Whatever the sector, shape or size of your organisation, our primary focus is to help you thrive. At the Heart of East Midlands Business News and Events.

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COVID-19 Business Support Hub

These are challenging times for business and although our ethos is to only shout about good news, we've created COVID-19 Business Support Hub on the Love Business the website to support you with expert tips, advice and ideas from your fellow businesses to help you get through this COVID-19 crisis. 

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