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CBILS – Coronavirus Business Interruption Loan Scheme

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CBILS – Coronavirus Business Interruption Loan Scheme

About The CBILS Scheme

The Coronavirus Business Interruption Loan Scheme [CBILS] provides financial support to smaller businesses [SMEs] across the UK that are losing revenue, and seeing their cash flow disrupted, as a result of the COVID-19 outbreak.

The scheme is part of a wider package of government support for the UK businesses and employees.

CBILS has been significantly expanded along with changes to the schemes features and eligibility criteria. The changes mean that even more smaller businesses across the UK impacted by the coronavirus crisis can access the funding they need.

Importantly, access to the scheme has been opened up to those smaller businesses that would have previously met the requirements for a commercial facility but would not have been eligible for CBILS. Insufficient security is no longer a condition to access the scheme.

This significantly increases the number of businesses eligible for the scheme.

How It Works

Saffron Financial operates CBILS via its accredited lenders including:

  • Challengers Banks
  • Asset-based lenders
  • Smaller specialist local lenders

A lender can provide up to £5 million in the form of:

  • Term loans
  • Overdrafts
  • Invoice finance
  • Asset Finance

CBILS gives the lender a government-backed guarantee for the loan repayments to encourage more lending.

The borrower remains fully liable for the debt.

Under the scheme, personal guarantees of any form will not be taken for facilities below £250,000.

For facilities above £250,000, personal guarantees may still be required, at a lender’s discretion, but:

  • Recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied.
  • A Principal Private Residence [PPR] cannot be taken as security to support a personal guarantee or as security for a CBILS backed facility.

Who Is Eligible

Your business must:

  • Be UK based in its business activity
  • Have an annual turnover of no more than £45 million
  • Have a borrowing proposal which the lender would consider viable, were it not for the current pandemic
  • Self – certified that it has been adversely impacted by the COVID-19 coronavirus
  • Not have been classed as a ‘business in difficulty’ on 31 December 2019, if applying to borrow £30,000 or more

A ‘business in difficulty’ is a business that has accumulates losses of more than half of its subscribed share capital for limited companies, or for unlimited liability company its capital. A business that has started or fulfilled the criteria to be put in to collective insolvency proceedings.

Lenders will need further information to confirm eligibility. All lending decisions remain fully delegated to the accredited lenders on our panel.

What Our Lenders Need From You

When you apply for a business loan, most of our lenders will ask you for the following:

Loan Details

  • The amount you would like to borrow
  • What the money is for – the lender will check that it’s a suitable business purpose and the right type of finance for your needs
  • The period over which you will make the repayments – the lender will assess whether the loan is affordable for you

Supporting Documents

You will need to provide certain document when you apply for a CBILS backed facility. These requirements vary from lender to lender, but are likely to include:

  • Management accounts
  • Business plan
  • Historic accounts
  • Asset details

If you don’t have everything listed here, a CBILS loan could still be an option to provide finance to support your business.

If you have any questions regarding The Coronavirus Business Interruption Loan Scheme, please don’t hesitate to contact Saffron Financial on 01925 594 455 or via email our team@saffronfinancial.co.uk.

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Who are Saffron Financial?

Saffron Financial is the in-house direct lead generation arm of Saffron Asset Finance.

Saffron Financial provides brokerage services to businesses and individuals in the UK through a range of financial services.

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