Update 6 April 2020
The recently launched Coronavirus Business Interruption Loan Scheme (CBILS) has now been significantly expanded along with changes to the scheme’s features and eligibility criteria. The changes mean 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 who would have previously met the requirements for a commercial facility but would not have been eligible for CBILS. This significantly increases the number of businesses eligible for the scheme. The expanded scheme will be operational with lenders from Monday 6th April 2020.
The CBILS Website will provide further details and remains the best source of up to date information and I would direct any queries here rather than to me initially.
New scheme features
- No personal guarantees for facilities under £250k: Personal guarantees of any form cannot be taken under the scheme for any facilities below £250k.
- Personal guarantees for facilities above £250k: 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 CBIL backed facility.
- Security: For all facilities, including those over £250,000, CBILS can now support lending to smaller businesses even where a lender considers there to be sufficient security, making more smaller businesses eligible to receive the business interruption payment.
After some of the horror stories I had read about, it is great to now have this clarity and the fact that some banks had been offering APR’s at 29%; yes 29%, I believe the Government has clamped down on this. I also believe that fewer business should now be getting forced down the commercial loan route first.
Don’t forget though it is all about responsible lending and if repayment is likely to be beyond the 12 month period then other options might be more suitable and actually cheaper.
Finally if you need to have a chat with me please contact me. I can do zoom calls, FaceTime or just the normal phone call. Don’t bury your head in the sand, talk to me, and stay safe.