CBILS – No personal guarantees under £250k and available to all viable SMEs

CBILS – No personal guarantees under £250k and available to all viable SMEs

9:39 AM, 3rd April 2020, About 4 years ago 6

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The Chancellor Rishi Sunak is today (Friday 3 April) taking further action to support firms affected by the coronavirus crisis by bolstering business interruption loans for small businesses.

To maximise the support available, the Chancellor is extending the CBILS so that all viable small businesses affected by COVID-19, and not just those unable to secure regular commercial financing, will now be eligible should they need finance to keep operating during this difficult time.

The government is also stopping lenders from requesting personal guarantees for loans under £250,000 and making operational changes to speed up lending approvals. The government will continue to cover the first twelve months of interest and fees.

More than £90 million of loans to nearly 1,000 small and medium sized firms have been approved under the government’s Coronavirus Business Interruption Loan Scheme (CBILS) since its launch last week. And a government-backed scheme to provide financing to larger companies, being operated by the Bank of England, has also provided almost £1.9 billion of support to firms and a further £1.6 billion has been committed.

The new Coronavirus Large Business Interruption Loan Scheme (CLBILS) will ensure that more firms are able to benefit from government-backed support during this difficult time. It will provide a government guarantee of 80% to enable banks to make loans of up to £25 million to firms with an annual turnover of between £45 million and £500 million. This will give banks the confidence to lend to more businesses which are impacted by coronavirus but which they would not lend to without CLBILS. Loans backed by a guarantee under CLBILS will be offered at commercial rates of interest and further details of the scheme will be announced later this month.

Chancellor of the Exchequer, Rishi Sunak MP, said: “We are making great progress on getting much-needed support out to businesses to help manage their cashflows during this difficult time – with millions of pounds of loans and finance being provided to hundreds of firms across the country.

“And now I am taking further action by extending our generous loan scheme so even more businesses can benefit. We have also listened to the concerns of some larger businesses affected by COVID-19 and are announcing new support so they can benefit too.

“This is a national effort and we’ll continue to work with the financial services sector to ensure that the £330 billion of government support, through loans and guarantees, reaches as many businesses in need as possible.”

The Chancellor will be speaking to bank Chief Executives next week to discuss how the schemes are working and ensure everybody is playing their part.

There have now been over 130,000 enquiries from businesses across the country for business interruption loans, according to latest figures from UK Finance. Some 983 businesses have had finance approved, while banks are processing thousands of loan applications – and scheme changes made today will help them approve loans for the smallest businesses as quickly as possible.

The first firms to receive business interruption loans included Hartlepool-based H.T.E.S (Northern), which provides training and assessment services to the engineering, petrochemical and construction sectors. This company received a £60,000 loan backed by the scheme, enabling it to continue to operate, even though sales have dropped by 75%.

Brian Goodlad, Director of H.T.E.S (Northern) said: “We have seen a significant drop in sales following the start of the coronavirus outbreak. The CBILS support provided by Business Enterprise Fund provides a boost to our cashflow which ensures certainty and stability in very difficult circumstances.

“It is an important lifeline that will help us survive and safeguard 15 full and part-time jobs”

For loans over £250,000, personal guarantees will be limited to just 20% of any amount outstanding on the CBILS lending after any other recoveries from business assets. Lenders were already prohibited from asking business owners to put their house on the line, but today’s changes will provide further reassurance regarding personal assets during this difficult time.

This will apply to finance already offered under the scheme, to ensure that all business owners receive the same level of government protection.

Business Secretary Alok Sharma MP said: “The coronavirus pandemic represents a challenge to businesses unlike any other they have faced before and we are determined to support them through this difficult time.

“The changes we are making to the Coronavirus Business Interruption Loan Scheme will make it easier for business to access the lending we have put in place, helping them to continue trading and protect the livelihoods of their staff.”

Last week, the Chancellor and the Governor of the Bank of England, Andrew Bailey, wrote to banks asking them to support small and medium-sized enterprises in any way they can. This included ensuring interest rates offered to struggling businesses are reasonable and to pass on the benefit of the Government guarantee to those borrowing under the Coronavirus Business Interruption Loan Scheme.

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10:42 AM, 3rd April 2020, About 4 years ago

Irrelevant as not available to landlords as 50% of your business needs to come form trading activity to qualify and landlords are not traders but investors

Neil Patterson

10:47 AM, 3rd April 2020, About 4 years ago

Many Landlords are also business owners.


10:49 AM, 3rd April 2020, About 4 years ago

Reply to the comment left by Neil Patterson at 03/04/2020 - 10:47
yes but if your main business is property rental then you cannot apply for the loans.

Vedran Beader

12:15 PM, 3rd April 2020, About 4 years ago

Reply to the comment left by Neil Patterson at 03/04/2020 - 10:47
Is there any clarity as to which circumstances these loans would apply to ltd company property activities? If a company purchase property, engages in development and ultimately rents it to tenants and refinances, does that constitute trading?

Neil Patterson

13:42 PM, 3rd April 2020, About 4 years ago

This is the Criteria and how to apply page from HMRC >> https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/for-businesses-and-advisors/

Your business must:

Be UK-based in its business activity
Have an annual turnover of no more than £45 million
Have a borrowing proposal which the lender would consider viable, were it not for the current pandemic
Self-certify that it has been adversely impacted by the coronavirus (COVID-19).
View our Quick Eligibility Checklist

Businesses from any sector can apply, except the following:

Banks, insurers and reinsurers (but not insurance brokers)
Public-sector bodies
Further-education establishments, if they are grant-funded
State-funded primary and secondary schools
View our CBILS frequently asked questions for businesses

john mcghee

14:37 PM, 4th April 2020, About 4 years ago

The problem l have with my tenants is that some of them are allowed to work but have asked for 3 months mortgage deferrals in case they are out of work later on and will need the money to live then. I have applied for help from the mortgage lenders and despite contacting them at least 3 times l am in limbo.
No answers, no reasons, no contact, no mortgage relief.
I dont want to name the companies as l don't want to slander them.
Any ideas where l go next ?

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