In March, Chancellor Rishi Sunak announced several new measures designed to support businesses during the current Coronavirus lockdown.  This included the launch of a new Coronavirus Business Interruption Loan Scheme.

Sometimes referred to as CBILS, the loan programme was developed to encourage lenders to make funds available to businesses facing cashflow problems as a result of Covid-19. In the few weeks since the programme was introduced, we at Finance For Enterprise have approved over £1 million through the CBILS scheme to support the region’s SME businesses.

If you are considering applying for CBILS lending, there are a number of different ways in which the programme can help your business. Some lenders will be able offer overdrafts, invoice finance and asset finance, whereas others like Finance For Enterprise exclusively provide business loans. All accredited CBILS partners supporting the CBILS programme are listed on the British Business Bank’s website.

It’s worth remembering that not all forms of lending are available from all lenders. In the first instance, speak to your bank: they have an existing business relationship with your company and will be able to explore a range of different options which may not be available from other lenders, for example, extending overdrafts.

When the loan scheme was first announced, the Chancellor indicated businesses can potentially access up to £5 million through the scheme. However, just as not all types of CBILS lending is available from all lenders taking part in the scheme, the amount which can be borrowed can vary between lenders. For example, at Finance For Enterprise, the maximum lending of our CBILS loans is £250,000.

One of the primary reasons why the funds available through CBILS can differ from lender to lender is due to the way in which CBILS loans are funded.  All loans offered under the CBILS scheme are funded by each lending provider, rather than through Government money. 80% of the value of these loans is underwritten by Government, encouraging lenders to support viable and profitable businesses.

Finally, it is also worth remembering that there are some exclusions and not all types of businesses can be supported through the CBILS programme.

If you are thinking about applying for lending under the CBILS scheme, business owners should approach the process like any other prospective loan agreement. Spend time thinking about the help and support your business needs and also consider how the lockdown will affect your ability to repay any future lending commitments.

Typically, lenders will expect an application to be supported by historical accounts, a business plan and cash flow forecasts but there are differences between a CBILS loan and other forms lending. For example, an optional 12 month interest free period and no fees are charged when making a CBILS loan application.

Should you decide to contact Finance For Enterprise, to discuss a possible CBILS loan application, we will assign you with a dedicated Investment Manager who will guide you through the application process. Our aim is to ensure funds are released to businesses as quickly as possible.

To explore CBILS further, please email: info@finance-for-enterprise.co.uk or call us on: telephone: 0333 014 3455

Useful links:

• Details of all accredited lenders and the different support packages available for your business can be found here
• We have also published further details here.

Andrew Austwick, Managing Director, Finance For Enterprise

This article was first published in the Sheffield Telegraph on 23rd April 2020.