The government's CBILS and BBLS initiatives are helping SMEs across the UK get access to a Covid-19 business loan. On November 2, the government announced that the Coronavirus Business Interruption Loan Scheme (CBILS) would be extended to January 31, 2021.
How do I apply for a government sponsored loan?
Applications for government-sponsored loan programs – including BBLS and CBILS – are open until January 31, 2021. Companies have the opportunity to repay their loans over a period of 10 years through a “Pay as you grow” initiative. When a business is in “real trouble”, six month interest payments and a payment vacation are available.
There are currently over 100 accredited lenders funding businesses through the CBILS program. Funding Options has partnered with more than 40 of them. You can apply for a CBILS loan on our platform. The benefit of applying through an accredited partner like Funding Options is that a financial specialist will guide you through the process.
What do i need to apply?
First, you must be a UK based company to apply for government backed assistance. For a BBLS loan, the lender will ask you to submit a short online application form and explain to yourself that you are eligible and that Covid has affected your business.
For CBILS loans, you will be asked to self-certify and may need to provide:
- Details – how much you want to borrow, what it is for and how long it will take to repay
- Documents – information about administration and accounts, business plan and assets
The type of documentation you will be asked for depends on the lender. You may still be able to get a CBILS loan even if you don't have access to all of the above information. To qualify for the CBILS, your annual turnover cannot exceed £ 45 million. If you are applying for a loan of £ 30,000 or more, you must not have been classified as a company in trouble.
What are the features and benefits of CBILS?
CBILS loans of up to £ 5 million are partially guaranteed by the government to encourage lending. A business interruption payment is made to cover the first 12 months of interest payments on the loan, along with any fees charged by the lender.
The borrower is always fully liable for the debt.
Fortunately, no personal guarantee is required for loans below £ 250,000. A personal guarantee may be required for those who exceed the threshold at the lender's discretion.
In this case, however, the clawbacks are limited to 20 percent of the outstanding balance of the CBILS facility after the proceeds of the business assets have been used.
Principal Private Residences (PPR) are excluded.
- Loans of up to £ 5 million
- Government backed partial guarantee
- The government covers the first 12 months of interest payments
- No guarantee fees for SMEs
What types of loans are available through the CBILS?
Businesses across Covid face different challenges, which is why CBILS loans come in different forms. You can request:
- A fixed-term loan financing that is repaid in regular payments over a set period of time.
- Overdrafts – a line of credit that can increase short-term cash flow
- Invoice Financing – Borrowing funds based on your clients' debts
- Asset Finance – used to spread the cost of new business
Can I convert my BBLS loan to a CBILS loan?
If you've been given a loan through the BBLS to meet working capital needs but need more than £ 50,000, you may be able to raise additional funding through a CBILS loan – as long as the new funding ties in with the original one.
Covid-19: Finding an Alternative Business Loan
If you are not eligible for any of the government's Covid-19 business loan programs, there are numerous other options available. Not only does Funding Options work with 40+ CBILS lenders, but it also works with hundreds of lenders and offers a wide variety of alternative financing products including:
- Unsecured Business Loans – Fund up to £ 250,000 with no security. Suitable for companies with no / few assets that do not want to provide security or need funds quickly
- Revolving Credit – Pre-approved funds with an ongoing arrangement. A good alternative to overdrafts and often more accessible
- Bridging finance – a type of short-term business loan that gets you from A to B until you can pay it off or secure longer-term funding
Whether you're looking for cash flow headroom, working capital financing, or financing for growth or assets, financing options can help. In addition to the weakening of the effects of Covid, the Brexit transition phase is also rapidly approaching.
We're here to support your business through winter through spring and beyond. To access financing, speak to one of our business finance specialists on +442039848571 or fill out our quick form. We will then contact you.
How to get a bridging loan offer