We previously provided an overview of the UK Government support schemes in respect of COVID-19. The package of measures is evolving rapidly.
Here we provide an update on:
- Changes to the Coronavirus Business Interruption Loan Scheme (“CBILS”)
- A new Coronavirus Large Business Interruption Loan Scheme (“CLBILS”).
Changes to the Coronavirus Business Interruption Loan Scheme (“CBILS”)
CBILS “went live” on 23 March 2020. It provides facilities of up to £5 million for smaller businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cash flow. It supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance. The scheme provides a lender with a Government-backed guarantee.
Originally, at the discretion of the lender, the scheme was able be used for unsecured lending for facilities of £250,000 and under. For facilities above £250,000, the lender was required to establish a lack or absence of security prior to businesses using CBILS. If the lender could offer finance on normal commercial terms without the need to make use of the scheme, they would do so. Further, to be eligible for CBILS, the borrower was required to have an annual turnover of no more than £45m.