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CBIL – Where are we now?

 

Coronavirus Business Interruption Loans – CBILs

A lot has happened over the last two weeks since the Chancellor announced the massive package of help for businesses.  One of the measures was the Coronavirus Business Interruption Loans (CBILs).

We wrote to you after the announcements giving you information in as much as we knew at the time. 

Since then we have heard a few stories about the banks refusing lending and some asking for personal guarantees from directors.  This later point was raised in one of the daily government updates on Coronavirus last week. See our clarifications below.

So … To Recap

CBILs has been introduced by the Government as part of the wider measures to support the UK SMEs during the COVID-19 outbreak. The scheme is designed to provide lenders with a government-backed guarantee, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’. The government has announced that CBILs will be demand-led and will be resourced accordingly.

Key facts:

 

    • £25,000 to £5 million loan facilities (some lenders will go below £25k)
    • Invoice Finance, Term Loans, Asset Finance, Commercial Property

Business must still be a viable option

 

    • No interest for the first twelve months

 

    • Repayment period of up to six years for loans

 

    • For overdrafts and invoice finance facility the term is shortened to three years

 

    • Scheme provides the lender 80% guarantee against the capital borrowed

 

    • Borrower remains 100% liable for the debt

Businesses should apply via their existing bank or a lender accredited via the scheme.

  • Myers Clark have access to a panel of lenders (about 10 so far from the 40) via an online platform so we can assist

  • Our advice is to have a two-prong approach, your bank and us

So where are we now

The Big 4 banks have agreed that they will not undertake personal guarantees for lending below £250,000. For loans above £250,000 the lender must first establish that there is no security before using a CBIL.  Main residential property cannot be taken as security under the scheme.

What is not common knowledge, but the British Business Bank is making it clear that the CBILs may only be applied for if every other government relief package has been taken: VAT deferment, Time to Pay for PAYE, NI, Corp Tax, Staff furlough, etc. 

We are talking to clients about all the above offerings and guiding them through their best options.  Now more than ever tighter control of your cash via a robust worst-case scenario cash-flow forecast will be your key tool to manoeuvre through these tough times.  We can help here.

Please call us and speak to your normal relationship director/manager if you would like to discuss any of the above or any other matter.  We are here to help you through these tough times. To access all of our latest advice in one place, please click on the below link. 

Above all - Stay Safe.

 

 

 

 

 

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