UK Covid-19 Business Interruption Loan Scheme Application: Eligibility and Guidelines

Filed in Loan by on November 19, 2020 0 Comments

The Coronavirus Business Interruption Loan Scheme (CBILS) provides financial support to smaller businesses affected by coronavirus (COVID-19). The scheme helps small and medium-sized businesses to access loans and other kinds of finance up to £5 million.

The government guarantees 80% of the finance to the lender and pays interest and any fees for the first 12 months. The scheme is open until 31 January 2021.

Eligibility

You can apply for a loan if your business:

  • is based in the UK
  • has an annual turnover of up to £45 million

You need to show that your business:

  • would be viable were it not for the pandemic
  • has been adversely impacted by the coronavirus

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If you want to borrow £30,000 or more, you also need to confirm that your business wasn’t classed as a business in difficulty on 31 December 2019.

Businesses from any sector can apply, except:

  • banks, insurers and reinsurers (but not insurance brokers)
  • public-sector bodies
  • state-funded primary and secondary schools

Loan Duration

The maximum length of the facility depends on the type of finance you apply for and will be:

  • up to 3 years for overdrafts and invoice finance facilities
  • up to 6 years, for loans and asset finance facilities

How to Apply

There are over 50 lenders participating in the scheme including all the main retail banks. You should approach a suitable lender yourself via the lender’s website.

You’ll need to tell the lender:

  • the amount you’d like to borrow
  • what the money is for
  • how long you’d like to pay it back

Supporting Documents

You’ll need to provide documents that show you can afford to repay the loan.

These may include:

  • management accounts
  • cash flow forecast
  • business plan
  • historic accounts
  • details of assets

The documents required will vary from lender to lender and depend on how much you’re asking for. If you’re asking your existing lender for a small loan, the process may be automated and not require all of the documents.

The lender will check that the loan is:

  • for a suitable business purpose
  • affordable for you
  • the right type of finance for your needs

The lender will decide whether to offer you a loan or another type of finance and you’ll be responsible for repaying 100% of the amount borrowed. If one lender turns you down, you can apply to other lenders in the scheme.

You may want to consider using a broker to find the right type of finance for your needs, or do your own research using the British Business Bank’s finance guide.

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