Coronavirus Business Interruption Loan Scheme (CBILS)

26th March 2020

CBILS is a new scheme that can provide facilities of up to £5m for smaller businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cashflow. CBILS supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance facilities.

What can the scheme be used for?

  • Cashflow loan
  • Overdraft cover
  • Invoice finance (factoring)
  • Asset finance (HP) – New assets only

What can’t it be used for?

The scheme can’t be used for refinancing existing loans or HP’s currently, but this is under review.

When is the scheme available?

The scheme went live on 23rd March and is available for six months. However, lenders are asking for people not to apply until next week at the earliest because they do not have systems in place to deal with this yet. This is compounded by them having staff shortages due to Coronavirus.

How do I apply?

Application is made direct to lenders as normal or via a finance broker.

A list of lenders is available here:

Do I need to provide a personal guarantee?

No. The Government has advised lenders that they will guarantee 80% of the loan on your behalf and not to ask for any personal guarantees. As of this morning some banks are still doing so. So, if your lender is asking for a personal guarantee then try another lender.

Are all lenders the same?

No. There are three tiers of lender. Depending on your risk level the interest rates are relative to the tier of each lender.

What are the interest rates and charges?

The rate of interest will depend on the lender you use. Tier 1 lenders rates will be less than Tier 3. The Government will cover all fees for setting up the loans and all of interest for the first 12 months.

How does that help?

Loans are ‘front loaded’ with interest. This then means that a large proportion of the interest is due in the first year as the debt is higher and reduces with Capital Repayments. As the Government is covering this interest in the first year (on your behalf) it brings down the effective rate of interest over the term of the loan. For example, a 2% loan (please note that we do not know the interest rates and this is for calculation purposes only) over two years could equate to a 1.2% rate of interest in the second year because so much interest is charged at the beginning. If you settle within the first 12 months, no interest will be payable.

Can you advise me on the loans?

Unfortunately, we can’t. We’re not allowed to provide financial advice. If you require any financial advice then please either contact your current financial adviser, bank or you can contact Jon Dufton, CFT Finance Ltd on 07498 174618. Jon is offering his advice to our clients free of charge and he will be able to let you know which lenders fall into which tiers and where best to start.

How quickly will I get the money?

This will depend on the lender, but it appears that this is likely to be the end of April for the early applicants.