23 March 2020

Business Loan Scheme - more information

Information made available by one bank today. Note the second bullet point.

- CBILS will provide support to small and medium sized businesses to be able to access bank finance during this unprecedented period, free of charge and subsidised by the Government for the first 12 months
- Prior to considering CBILS for any Client, the Bank will first consider if we can lend on normal commercial terms. This includes investigating the availability of any sources of Client security which they could otherwise use.
- The scheme is available to all qualifying UK companies with an annual turnover of up to £45 million
- The maximum facility is £5 million for terms of up to 6 years. The borrower will pay no arrangement fees or interest for the first year, but normal commercial pricing will be reimbursed to the banks / lender by BBB/HMT and then charged to the borrower from Year 2 onwards
- Initial facilities can be offered as a CBIL Overdraft in the first instance if exact requirements or tenors are not yet known and may then be converted to term loans later
- CBILS provides lenders with a Government-backed guarantee of 80% on facilities of up to £5 million in cases where a lender would not otherwise be able to provide finance to a business. Lenders are encouraged and may still require security for the facility.
- The Client remains liable for the whole amount of the debt
- The Scheme Eligibility criteria is robust and must be met in full for all CBILS facilities Most industries are eligible with the exception of financial services, quasi public bodies and education.
- Lenders will assess the viability of a business before Covid-19 disruption, accepting that there may be short term performance impacts during the current environment. Lenders will also be required to determine that the business should be successful and viable again in future.
- The Scheme is designed to support those businesses that were trading successfully before Covid-19 but now face difficulty as a result of the current Covid-19 disruption, and in our judgement will trade successfully again following the crisis.
- In order to support any request for assistance under this scheme we will require the following information
Up to date Management Information
Latest final year end accounts
Impact of COVID 19 - Evidence of management impact assessment (trading cycle / cashflow cycle) and a forecast of the Business Cashflow supported by clearly worked assumptions. There needs to be a very clear understanding of funding purpose and as a minimum a detailed month by month projected cash flow for the next 6 months.
proposed strategy to re-establish business as usual post this crisis.