As per the British Business Bank we now expect the new scheme to become available week commencing 23 March 2020.
As well as loans, there are many other types of finance supported by the programme, depending on the provider; these include Term Facilities, Overdrafts, Invoice Finance and Asset Finance.
Here at Reach Commercial Finance, we can work with the participating providers in assisting with any business enquiry. The Scheme will offer more attractive terms for both businesses applying for new facilities and lenders, with the aim of supporting the continued provision of finance to UK businesses during the Covid-19 outbreak.
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.
If the accredited lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so. Where the small business has a sound borrowing proposal but insufficient security, the lender will consider the business for support via the scheme.
To be eligible for support via the CBILS, the business must be:
- UK based, with turnover of no more than £41 million per annum
- Operate within an eligible industrial sector (a small number of industrial sectors are not eligible for support)
- Able to confirm that they have not received de minimisState aid beyond €200,000 equivalent over the current and previous two fiscal years
- Have a sound borrowing proposal, but insufficient security to meet the lender’s requirements
Full eligibility criteria will be published shortly
Finance terms are from three months up to ten years for term loans and asset finance and up to three years for revolving facilities and invoice finance.
As we understand it to date, the scheme will be available to apply for from early next week (w/c 23 March).
Please do not hesitate to contact any of the team here at Reach and we will assist you as best we can. We will continue to update you in the coming days, weeks and possibly months in line with further announcements of government measures.
Back to updates