CBILS and Bounce Back Loans: Deadlines fast approaching

It’s hard to believe that it’s nearly six months since we first wrote about the government launched Coronavirus Business Interruption Loan Scheme (CBILS), one of a series of measures put in place to provide financial support to small and medium-sized businesses (SMEs) affected by coronavirus (COVID-19). And yet, at the same time, it feels like a lifetime ago.

We are writing now to let you know that, unless the Government announces otherwise, businesses have just a few weeks to submit their applications before the CBILS closes.

The scheme was initially set to have a hard close, but lenders now have until 30 November 2020 to process applications that are with them by 30 September 2020. Any new applications received after this deadline will not be eligible for CBILS funding.

The scheme supports SMEs businesses, with an annual turnover of up to £45 million, to access loans, overdrafts, invoice finance and asset finance of up to £5 million for up to six years.

CBILS provides lenders with a Government-backed guarantee for up to 80 per cent on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs.

The Government also pledged to make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees, so businesses will benefit from no upfront costs and lower initial repayments.

Applying for CBILS has however proved to be extremely challenging, with many applications being declined. We therefore recommend you engage with a professional to support you through the CBILS application process.

Those seeking funding from the Bounce Back Loans Scheme have a little longer to apply, with this scheme closing on 4 November 2020.

The scheme helps SMEs to borrow between £2,000 and up to 25 per cent of their turnover. The maximum loan available is £50,000.

Applicants are required to complete a two-page self-certification form online. The government guarantees 100 per cent of the loan and there won’t be any fees or interest to pay for the first 12 months. After 12 months the interest rate will be 2.5 per cent a year.

If you require any assistance in making your applications, please contact your usual Beavis Morgan Client Partner. Alternatively, please contact John Weeden at Cadence Advisory, a Beavis Morgan group company.

For further information about the Government measures to protect individuals and businesses, visit our COVID-19: Support for UK businesses hub.