Know your facts about CBILS

This programme is being run by the British Business Bank and has been based on the existing Enterprise Guarantee Scheme.

• Funds are available from £25000- £5m
• Covers loans, asset finance and Invoice Finance
• 40 lenders have looked to sign up to the scheme and more are applying daily.

The guidelines for the scheme are laid down by the British Business Bank and most importantly for most businesses here in the UK the things they need to know is:

• Maximum funding is 25% of 2019 turnover or double the annual wage bill whichever is the greater.
• Your request has to be deemed as viable by the lender, they will not support a business that they would not have provided facilities to pre this crisis. If you were declined previously its unlikely they will support you now.
• The guarantee is to the lender and covers 80% of the facility. The business is liable for 100% of the debt and of course the bank for 20%. This means both the applicant and the lender need to know they can come out of this post crisis. Difficult to know when we cannot predict an end date.
• Term 1-6 years.
• Loans up to £250,000 do not require personal guarantees.
• Interest is covered for the first 12 months by the government.
• A capital repayment holiday can also be requested.
• No early repayment charges apply.

Timescales

We believe that unsecured deals should be able to proceed within a week to 10 days, however we are hearing this may be more like 2 weeks as staffing issues continue to hit the banks.
If facilities are at the higher end of the scheme- where security is required then we see with the need for valuations, lawyers etc then this is likely to be more like 8-12 weeks if this can be executed to plan. The issue here is of course valuers are not able to go out in most cases and hence we may need to see banks take a more pragmatic approach to valuations.

Best advice

• Approach your own bank first, they know more about you, they have sight of your trading account. They also seem to be proactively prioritising existing clients.
• Be prepared, they will want information, get historic accounts together but also they want to know you can trade through this so look at preparing forecasts, also management accounts so they can see where performance is at now.
• Then finally keep your options open. You may not be able to access this scheme and may need to look at other options. Don’t put all eggs in one basket and run options in parallel so they you have a fallback position.

We are here to help and can assist you if you need to look at the other options available.