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Chris Tate

Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBLS)
CBILS and BBLS provide financial support to smaller businesses (SMEs) across the UK that are losing revenue, and seeing their cash flow disrupted, as a result of the COVID-19 outbreak. CBILS accredited lenders can be found here.

Both CBILS and BBLS are due to end on 31 March 2021. Those considering these schemes need to have started their application by 31 March 2021. Further details regarding CBILS can be found here.

New Recovery Loan Scheme

The March 2021 budget announced a new Recovery Loan Scheme (RLS) to replace CBILS and BBLS. The new Recovery Loan Scheme will open on 6 April 2021 and will run until 31 December 2021 (subject to review).

The new Recovery Loan Scheme will operate in a similar fashion to CBILS in that:
  • Government will guarantee 80% of the lending;
  • Personal Guarantees will not be sought for facilities up to £250k;
  • A borrower’s principal private residence cannot be taken as security.
All UK businesses of any size are eligible to apply for a loan or overdraft between £250k and £10m, and/or asset and invoice finance between £1k and £10m. Term loans and asset finance will be available for up to a 6 year term, whilst overdrafts and invoice finance will be up to 3 years. Full details on how to apply will be announced in the coming weeks.

Some of key eligibility criteria for the New Recovery Loan Scheme will be as follows:
  • The business must be viable or would otherwise be viable were it not for the impacts caused by Covid-19;
  • The business must have been adversely impacted by the pandemic;
  • The business must not be subject to insolvency proceedings;
  • Banks, building societies, insurers, public-sector bodies and state funded schools are not eligible.
Individual lenders are likely to have additional eligibility criteria and applications will be subject to each lenders own assessment. We recommend that you contact your existing lender to establish full eligibility criteria and details of the application process.

If you have concerns regarding the financial impacts of Coronavirus on your business and/or your working capital needs, please contact us for a no obligation consultation to explore your options. 

Moore (South) Contact Us

Key features of the CBILS Scheme
Finance of up to £5 million - The maximum value of a facility provided under the scheme is £5 million, available on repayment terms of up to six years.

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.

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.
Finance terms - For term loans and asset finance facilities: up to six years. For overdrafts and invoice finance facilities: up to three years.

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. No personal guarantees for 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.

No guarantee fees for businesses - There are no guarantee fees for SMEs. Lenders pay a fee to access the scheme.

Do I qualify?
Your business must:
  • Be UK-based in its business activity
  • Have an annual turnover of over £200k (less than £45 million)
  • 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).
  • Eligible business (excluded sectors include banks, insurers exc brokers, public-sector bodies, grant funded further education establishments and state-funded primary/secondary schools)
Each lender may have additional eligibility criteria and you should check the lenders CBILS criteria on their website.

How to apply
You should approach a lender yourself, ideally via the lender’s website. You should first approach your existing lender and if turned down, you can still approach other lenders within the scheme.

There is high demand for CBILS facilities. Phone lines are likely to be busy and branches may not be able to handle enquiries in person.

Not every accredited lender can provide every type of finance available under CBILS, and the amount of finance offered varies between lenders. Please see the lenders’ websites for more information on the amounts they are able to offer.

What information and documents will I need?
You will need to provide certain evidence to show that you can afford to repay the loan. This is likely to include:
  • Management accounts
  • Cash flow forecast (up to 3 years)
  • Business plan
  • Historic accounts
  • Details of assets
The above requirements will vary from lender to lender, however the more robust the information provided, the greater prospect of success. If you do not have everything listed here, a CBILS loan could still be an option to provide finance to support your business.

For many customers approaching their existing lenders for a smaller facility, the process may be automated and therefore may not require the same level of documentation.

Other information
Businesses should also consider requesting a repayment holiday from their existing finance provider to help with cash flow.