In light of the recent announcement made by the Chancellor Rishi Sunak on March 17th 2020, here is the breakdown on how the Coronavirus Business Interruption Loan Scheme (CBILS) will work.

Portman Asset Finance has been in direct contact with lenders participating in the scheme to get more of an insight into the process.

What is the scheme?

The scheme announced by the chancellor is designed to help support businesses through these unprecedented times with access to finance.

Rishi Sunak speaking from Downing Street yesterday stated: “Any business who needs access to cash to pay their rent, the salaries, suppliers, or purchase stock, will be able to access a government-backed loan, on attractive terms.”

He continued: “And if demand is greater than the initial £330 billion I’m making available today, I will go further and provide as much capacity as required. I said whatever it takes – and I meant it.”

The government backed company who has been tasked with making CBILS available to businesses, as soon as possible, is British Business Bank who recently updated their website to inform that: “We now expect the new scheme to become available in week commencing 23 March 2020.”

How it works?

Documentation released by the British Business Bank states: “The scheme provides the lender with a government-backed guarantee against the outstanding facility balance, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’.” NB – the borrower always remains 100% liable for the debt.

“The Government will also cover the first 6 months of interest payments, so businesses will benefit from lower initial repayments. The business remains liable for repayments of the capital. The maximum value of a facility provided under the scheme will be £5 million pounds.”

Finance terms are from three months up to ten years for term loans and asset finance. We have been told by lenders that the application process should still be as simple as a standard finance application.

How do I apply?

The current advice we have received from the British Business Bank is to outline funding requirements to the participating lenders and they will gather information required and if your business is eligible.

A direct quote from information on the British Business Bank website says “If the CBILS lender can offer finance on normal commercial terms without the need to make use of CBILS, they will do so.

Where the small business has a sound borrowing proposal but no, or inadequate security, the lender will consider the small business for support via CBILS.”

At Portman Asset Finance we have six lenders on our panel that is involved with the scheme which make us a great option to help you get the very best finance deal for your business.

We are here to help businesses in these difficult times, call us on 01604 761276 to get more information, or alternatively check your eligibility online below.

Disclaimer: we do not have direct control on acceptance for interruption loans. The decision is made by the lender.

 

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