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Coronavirus Business Interruption Loan Scheme |
Coronavirus Business Interruption Loan Scheme Revised Terms |
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Provides the lender with a government-backed, partial guarantee (80%) against the outstanding guarantee facility balance, subject to an overall portfolio cap |
No change |
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No guarantee fee for smaller businesses to access CBILS |
No change |
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A fee charged to lenders for each facility which makes use of the scheme |
No change |
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Government has confirmed that the scheme will be demand-led and will be resourced accordingly |
No change |
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The maximum value of a facility provided under the scheme is £5m (the original announcement suggested a maximum value of £1.2m) |
No change |
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Repayment terms limited to a maximum of six years for term loan and asset finance facilities up to £5m. For overdrafts and invoice finance facilities, terms will be up to three years |
No change |
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Use of personal guarantees permissible for all facility sizes, at a lender’s discretion and in line with their normal policies |
For facilities under £250,000, use of personal guarantees not permitted under the scheme For facilities above £250,000, use of personal guarantees still permissible in line with their normal policies, but recoveries under these will be capped at a maximum of 20% of the outstanding CBILS facility amount (after other recovery proceeds applied) |
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Lenders required to demonstrate lending additionality (i.e. lending that without the scheme, wouldn’t have otherwise taken place) |
Scheme expanded to open-up access to those smaller businesses who would have previously met requirements for a commercial facility and would not have been eligible for CBILS |
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For facilities above £250,000, the lender must establish a lack or absence of security prior to businesses using CBILS. |
Insufficient collateral requirement removed, allowing those SMEs who are considered to have sufficient collateral to access CBILS facilities |
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At the discretion of the lender, the scheme may be used for unsecured lending for facilities of £250,000 and under |
For facilities under £250,000, use of personal guarantees not permitted under the scheme |
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For borrowing proposals which, were it not for the current pandemic, would be considered viable by the lender. |
Viability assessment unchanged but for small loans this determination could be based on the lenders’ internal credit models |
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Available to UK-based businesses with annual turnover of up to £45m per year |
No change |
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Principal Privates Residences cannot be secured (prior or post recovery) to support CBIL backed facilities. |
No change |
[1] Please note that where there is sufficient security available, it is likely that the lender will take such security in support of a CBILS facility
[2] Fishery, aquaculture and agriculture businesses may not qualify for the full interest and fee payment.
[3] The following are not eligible under CBILS: Banks, Insurers and Reinsurers (but not insurance brokers); public sector bodies, further educational establishments if they are grant funded and state funded primary and secondary schools.