CBILS is a UK Government scheme that can provide facilities of up to £5 million for SMEs 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.
The key features of CBILS are:
1. Finance upto £5 million – The maximum value of a facility provided under the scheme is £5 million, available on repayment terms of up to six years.
2. Guarantee to the lender to encourage them to lend - The scheme provides the lender with a government-backed, partial guarantee against the outstanding balance of the finance. The borrower remains 100% liable for the debt.
3. Government pays interest and fees for 12 months - The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied charges.
4. Finance terms - For term loans and asset finance facilities: up to six years. For overdrafts and invoice finance facilities: up to three years.
5. Security - Insufficient security is no longer a condition to access the scheme. For all facilities, including those over £250,000, CBILS can now support lending to smaller businesses even where a lender considers there to be sufficient security, making more smaller businesses eligible to receive the Business Interruption Payment.
6. Personal Guarantees & facilities under £250,000 - No personal guarantees for facilities under £250,000.
7. Personal Guarantees & facilities under £250,000 - Personal guarantees may still be required, at a lender’s discretion, for facilities above £250,000, but they exclude the Principal Private Residence (PPR) and recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied.
8. No guarantee fees for businesses - There are no guarantee fees for SMEs. Lenders pay a fee to access the scheme.