CBILS Made More Accessible to Small Businesses

Date: 06/04/20

CBILS Made More Accessible to Small Businesses

In an update from the Chancellor the Coronavirus Business Interruption Loan Scheme (CBILS) has now been made more accessible to businesses. Prior to the announcement businesses who satisfied a bank’s lending criterial for a normal commercial facility would not be eligible to apply for CBILS. However, the scheme has now been updated so that insufficient security is no longer part of the eligibility criteria. Therefore even where a business qualifies for a commercial facility then CBILS is still open to that business.

Another extension to the scheme is that lenders can no longer request personal guarantees for loans under £250,000. This is a significant relief to those that are seeking a loan but who are concerned about the personal risk that they are exposing themselves to by providing a personal guarantee, especially during these very uncertain times.

For facilities above £250,000, personal guarantees may still be required, at a lender’s discretion, but:

  • Personal recoveries under these guarantees are capped at a maximum of 20% of the outstanding balance of the CBILS facility after all the proceeds of the business’ assets have been applied;
  • a Principal Private Residence (PPR) cannot be taken as security to support a personal guarantee or as security for a CBILS backed facility

CBILS is Government backed where businesses are able to apply to borrow up to £5 million in the form of term loans, overdrafts, invoice finance and asset finance available on repayment terms over six years (for term loans and asset finance) and up to three years (for overdrafts and invoice finance facilities). No fee is payable by the borrower and the first 12 months of interest will be paid for by the UK Government. After this date the business will be liable for the costs of the loan. The borrower remains 100% liable for the loan.

The following eligibility criteria remain the same as before, i.e. the business must:

  • Be UK-based in its business activity
  • Have an annual turnover of no more than £45 million (per group total, if applicable)
  • 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).

Fishery, aquaculture and agriculture businesses may not qualify for the full interest and fee payment.

The following trades and organisations are not eligible to apply: banks, insurers and reinsurers (but not insurance brokers); public-sector bodies; further-education establishments, grant-funded businesses; and state-funded primary and secondary schools.

For more information about the CBILS please see the British Business Banks website for guidance on eligibility and details required for application:


The Loan is being offered by accredited lenders listed at https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils-2/current-accredited-lenders-and-partners/ . If you are not accepted by one provider you may still be eligible with other lenders.

Provided business activity is operated through a business account CBILS is open to:

  • sole traders
  • freelancers
  • body corporates
  • limited partnerships
  • limited liability partnerships

The business must generate more than 50% of its turnover from trading activity.

If the business has a loan under the old (and temporarily suspended) Government backed Enterprise Finance Guarantee (EFG) for small businesses and wishes to refinance to CBILS then this will be at the current lenders discretion and subject to certain limits. Businesses using the EFG scheme should talk to their lender.

James Cornthwaite FCA CTA

Author: James Cornthwaite FCA CTA

A former pupil at St Aidan’s C of E High School, James attended Blackpool Sixth Form College and Lancaster University, graduating in 2004, gaining BSc. first class honours. He joined Moore and Smalley, Preston in 2005 and qualified as a...

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