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How to get a Government Coronavirus Business Interruption Loan

British Business Bank

Information last updated: 20:00, 25 March 2020

The Coronavirus Business Interruption Loan Scheme (CBILS) is now open for applications. 

In this post, we explain who’s eligible and what you can get.

What is the Coronavirus Business Interruption Loan Scheme?
Are you eligible for the Coronavirus Business Interruption Scheme?
What types of finance can you get through this Scheme?
How much can you borrow through this Scheme?
How much interest or other fees will you have to pay?
Why has the Government launched this Scheme?
How do you apply to the Coronavirus Business Interruption Scheme?

What is the Coronavirus Business Interruption Scheme?

The Coronavirus Business Interruption Loan Scheme was announced by the Chancellor during the 2020 Budget

The Scheme provides finance for small businesses in the UK. In particular, for businesses which have or will have their cash flow disrupted by lost or late income due to the coronavirus outbreak.

Are you eligible for the Coronavirus Business Interruption Scheme?

To be eligible to apply through this Scheme, your business must:

  • be based in the UK
  • have an annual turnover of no more than £45 million
    (This is how the Government is defining ‘small- or medium-sized enterprise’ for this Scheme.)

To be eligible to get finance through this Scheme, your lender must:

  • confirm that based on your proposal, if it were not for the coronavirus disruption, you’d have a viable business that meets the lender’s normal lending requirements, and
  • believe that with the finance you get from the Scheme, you’ll be able to stay in business and continue trading in the short- or medium-term

If you’re not sure if your lender would decide you’re eligible, you can apply anyway. 

If a lender can offer finance on their normal terms without the Scheme, they will.

For more about who’s eligible and what’s available, visit the British Business Bank (BBB). The BBB is administering the Scheme on behalf of the Government.

What types of finance can you get through this Scheme?

  • Fixed-term loans with terms of up to 6 years
  • Asset finance with terms of up to 6 years
  • Overdrafts with term of up to 3 years
  • Invoice finance with term of up to 3 years

How much can you borrow through this Scheme?

Eligible businesses can get up to £5 million in finance: 

  • For up £250,000
    If lenders are willing to, they’re allowed to give you unsecured finance of up to £250,000 under this Scheme.
  • For £250,000 to £5 million…
    For larger amounts, the lender must establish that you can’t provide security before they lend to you on this Scheme. For example, if you have a sound proposal for why you’re borrowing and a robust business plan but you don’t currently have adequate security to meet a lender’s normal requirements, then they’ll consider lending to you on this Scheme.

Remember, if a lender can offer finance to you on their normal terms without the Scheme, they will.

How much interest or other fees will you have to pay?

There are no upfront costs and your first year of repayments will be lower. 

This is because the Government will pay fees the lender charges, such as to arrange your finance. The Government will also cover your first 12 months of interest payments.

You’ll still repay the full amount you borrow and if the term is more than 12 months, you’ll pay the interest after that.

You should check with your lender if there are any other fees you might have to pay.

Why has the Government launched this Scheme?

Generally, lenders have a strict set of criteria they use to decide whether to offer credit to businesses. In this coronavirus emergency situation, the Government wants to help small businesses so they’re giving selected lenders a guarantee on 80% of the money they lend, up to an overall cap per lender.

As the borrower, your business is still 100% liable for the debt, it’s just that the Government is helping to turn your lender’s ‘no’ into a ‘yes’.

How do you apply to the Coronavirus Business Interruption Scheme?

You need to apply directly to one of more than 40 participating lenders.  

Unfortunately the British Business Bank has not yet accredited any new lenders. We at Tide have lobbied hard to be allowed to participate and the BBB has now confirmed that new lenders will be able to join.

We’re working hard to be accredited as quickly as possible. If you’d like to be among the first to know as soon as we’re able to offer finance under this Scheme, join our Coronavirus Mailing Group.

Have your say

How is the coronavirus affecting you and your small business? We’re keen to hear from you – get in touch with us on LinkedIn, Facebook or Twitter.

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Photo by Chris Liverani on Unsplash

Suzanne Worthington

Senior Writer

Tide Team

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