Government backed loans

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Businesses should be able to access loans more easily now, as the emergency scheme gives lenders 80% cover on the loan, should you fail to meet repayment terms. Updated info below on 12 months interest free and no upfront costs.

Have had this from a lender:
  • This is a business interruption loan scheme supplied by the banks to assist businesses to access working capital to assist with the day to day expenses both during the pandemic and also to assist with the post pandemic restart
  • Loans are available from £25,000 to £5,000,000
  • Term of 1 to 6 years
  • First 12 months will be a fixed rate of 0%
  • Capital repayment holidays of 6 or 12 months are also available for the first 12 months of the loan
  • Fee free loan (no arrangement fee, no security fee etc.)
  • Loans of £25,000 to £100,000 will be secured by Personal Guarantees from all active directors
  • Loans of £100,000 to £250,000 will be secured by Personal Guarantees from all active directors and a debenture from the company
  • Loans of £250,000+ will be secured by Personal Guarantees from all active directors, a debenture from the company and tangible security if available
  • The directors are 100% liable for the loan
  • The Government will back the CIBLS loan to a maximum of 80% of the outstanding debt in the event of business failure and the Bank being unable to recoup the remaining funds from the company/directors


To apply we will need the following:
  1. Last 3 years financials accounts – must include detailed profit & loss account and the full balance sheet and notes to the balance sheet
  2. Management accounts to 31/12/2019
  3. Detailed breakdown of what the loan is required for
  4. The amount & term of the loan required.

The new Coronavirus Business Interruption Loan Scheme supports SMEs with access to working capital (including loans, overdrafts, invoice finance and asset finance) of up to £5 million in value and for up to 6 years.
The government will pay to cover the first 12 months of interest payments and any lender-levied fees, so smaller businesses will not face any upfront costs and will benefit from lower initial repayments.
The government will provide lenders with a guarantee of 80% on each loan (subject to a per-lender cap on claims) to give lenders further confidence in continuing to provide finance to SMEs.
This scheme is being delivered through commercial lenders, backed by the British Business Bank.

Eligibility

You are eligible for the scheme if:
  • your business is UK based, with turnover of no more than £45 million per year
  • your business meets the other British Business Bank eligibility criteria

How to access the scheme

The scheme is now open for applications. To apply, you should talk to your bank or one of the 40 accredited finance providers (not the British Business Bank) as soon as possible, to discuss your business plan. You can find out the latest on the best ways to contact them via their websites.
All major banks are offering this scheme. If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.
The full rules of the scheme and the list of accredited lenders are available on the British Business Bank website.

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