Q&As

What is the Coronavirus Business Interruption Loan Scheme and how can borrowers access it?

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Published on LexisPSL on 03/04/2020

The following Banking & Finance Q&A provides comprehensive and up to date legal information covering:

  • What is the Coronavirus Business Interruption Loan Scheme and how can borrowers access it?
  • What are the key features of the Coronavirus Business Interruption Loan Scheme?
  • Can lenders offering facilities under the scheme take additional guarantees and security?
  • Who can access the Coronavirus Business Interruption Loan Scheme (CBILS)?
  • How long will the scheme last for?
  • Is there any similar support available for larger businesses?
  • What is the process involved in applying for a loan under the scheme?
  • How is the scheme working in practice?

What is the Coronavirus Business Interruption Loan Scheme and how can borrowers access it?

What are the key features of the Coronavirus Business Interruption Loan Scheme?

The government has announced a number of measures to assist businesses through the coronavirus (COVID-19) crisis—the details of these are available here, and include financial help for specific types of businesses likely to be particularly badly affected, as well as providing assistance with payments of tax, salaries and sick pay. The Coronavirus Business Interruption Loan Scheme (CBILS) is one of the government’s key measures to support business through the crisis.

The key features of the scheme are as follows:

  1. it provides small- and medium-sized enterprises (SMEs) with access to loans, overdrafts, invoice finance and asset finance

  2. the government-owned British Business Bank provides a guarantee of 80% of the amount outstanding under each loan made under the scheme

  3. the maximum amount of each facility is £5m and the terms available are up to six years for term loans and asset finance and up to three years for overdrafts and invoice financing facilities

  4. the government will also make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees in relation to loans made under the scheme, resulting in no upfront costs and lower initial repayments, and

  5. there are 40 accredited lenders able to offer the scheme, including all the

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