Some fairy dramatic updates were announced to the Coronavirus Business Interruption Loan (CBILS) scheme overnight. This came on the back of pressure from the Government on lenders to bring the scheme in line with the original announcements!
Out of 150,000 applications so far, only 1,000 loans had been granted. This is obviously not going to save our small businesses which was the original intention!
The changes include:
- Businesses can now apply directly for CBILS, rather than being pushed through existing alternate (and more expensive) options.
- No Personal Guarantees will be required below £250,000, and beyond that level the Personal Guarantee will ONLY be required for 20% of the loan amount, utilising the Government’s promised 80%.
- Insufficient security is no longer a requirement to access the CBILS scheme.
- The application process should be easier. Lenders should not require full cash flow forecasts, but look at the payment history of existing borrowings and whether the business has operated within an existing overdraft as examples.
- Any applications already made and rejected should be revisited automatically, but we would recommend that if you have an application under consideration you speak to your contact and ask them to make sure this is the case. It can’t hurt to prove you’re aware of the reported changes!
More details on the scheme can be found on the British Business Bank website.