Coronavirus Business Interruption Loan (“CBIL”) – Rapid Response Team
Understandably many businesses have concerns about cash flow and job preservation. In response to this the Government recently announced the introduction of the Coronavirus Business Interruption Loan to support SMEs.
What is the Coronavirus Business Interruption Loan?
The coronavirus outbreak has caused an economic shockwave unprecedented in modern times, and perfectly viable businesses at the beginning of March have been plunged into financial turmoil through no fault of their own. We hope this will be an impact which will only last a matter of months, but the impact on cash flow for many businesses will be little short of catastrophic. Businesses need cash to get them over this devastating period, and they need it fast.
CBILS is a key plank of the government response. It is a state backed loan scheme aimed at supporting SMEs by providing access to finance facilities of up £5 million.
CBILS will be delivered by commercial lenders, including most major banks, and a number of asset-based lenders and specialist local lenders. The loans are 80% guaranteed by the state owned British Business Bank in order to give commercial lenders the support to lend to SMEs.
CBILS is be part of the support that banks are providing, they will also be providing “business as usual” financial solutions. In all cases it will be necessary to receive independent legal advice on the terms of the loan and any other facilities, and any security that needs to be provided. If legal charges are required over property or other assets it is not unheard of for lawyers to take many weeks to complete the loan documentation, delaying access to much-needed funds.
Who can access the Coronavirus Business Interruption Loan?
To access the CBIL, a business must be UK based in its business activity with an annual turnover of no more than £45 million.
Further, the business must have a proposal which, were it not for the effects of the outbreak of Covid-19, would be considered a viable proposal by the commercial lender, and which the commercial lender believes will allow the business to continue trading through financial difficulties in the short-to-medium term.
Should a business meet the above conditions, it does not automatically guarantee that they will be able to access the CBIL. The discretion for lending through the CBIL is delegated to the accredited financial provider. If an accredited financial provider can offer finance on normal commercial terms offered, without needing to access the scheme, then they have the discretion to do so.
How can a business access the Coronavirus Business Interruption Loan?
Businesses will be able to access the CBIL through an accredited financial provider who is taking part in the scheme. There are 40 accredited financial providers who are able to access the CBIL in part or in full. The 40 accredited financial providers include most high street banks, and some asset based lenders and specialist local lenders. A full list can be found here https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-scheme-cbils/accredited-lenders/
How can Harrison Drury help your clients to access the funds fast?
In response to this we have launched a dedicated CBILS Rapid Response team who can help businesses get their hands on their emergency loans faster, delivering advice on the loan agreement, and completing any necessary documentation in a matter of days. Our working capabilities have been unaffected by the lock down due to our investment in a cloud-based IT network which allows our team to work remotely and deliver the service you need when you need it.
It is also important that lawyers are geared up during the lock down to deal with the delivery of independent legal advice, electronic signatures, witnessing of documents and video conferencing which our CBILS Rapid Response team is set up to facilitate
Get in touch
Contact our dedicated coronavirus support team: