As part of the government’s plans to support struggling businesses affected by the coronavirus outbreak, the Coronavirus Business Interruption Loan Scheme (CBILS) will allow businesses to access loans which will keep their cash flow moving during any interruption to trading. But before you apply for the scheme, you should check whether you’re eligible for the government’s support.
What support is available?
CBILS has been set up to provide Small and Medium Enterprises (SMEs) with financial support to allow them to overcome the potential shortfall in takings anticipated as a result of social distancing. Through the scheme, SMEs can access up to £5 million in asset finance, invoice finance, overdrafts and term loans. Other measures to help businesses include the Coronavirus Job Retention Scheme, a Statutory Sick Pay relief package, and Time to Pay Arrangements with HMRC.
Am I eligible for support?
The scheme is open to any SME across most sectors of UK business, providing they meet the following criteria:
- The loan must be for business purposes
- Your SME must be based in the UK, with an annual turnover of less than £45 million
- More than 50% of the turnover must come from trading
- You will use the scheme primarily to support UK based trading
- You wish to borrow no more than £5 million
How can I apply?
To apply for CBILS, you should speak to your bank, or an accredited lender, of which, a number have been designated to provide the various types of finance the scheme offers. You can also approach finance brokers who work in conjunction with these lenders.
What if I get rejected?
If you apply for CBILS and you don’t meet the criteria mentioned above, or your business is part of one of the sectors barred from accessing the scheme, you won’t be eligible for the support.
Among the sectors ineligible for the scheme are; banks and building societies, insurers, organisations in the public sector, trade unions and religious organisations. Your business will also be ineligible if it was insolvent before the coronavirus; a measure to ensure companies struggling from deeper rooted financial issues don’t misuse the scheme.
The Coronavirus Business Interruption Loan Scheme (CBILS) is one of the measures set up by the government, intended to support eligible businesses that would otherwise be profitable without the cash flow problems caused by the coronavirus. The scheme will allow SMEs to borrow up to £5 million through various finance options, given that they meet the criteria. If your business’ financial problems don’t originate from the coronavirus, or your business is in one of the sectors not included in the scheme, then you won’t be eligible for the support.
How we can help
If your business was profitable before the coronavirus outbreak, speak to our commercial finance team at WF Financial Solutions, who can put you in touch with an accredited lender and allow you to access the scheme. Alternatively, if your financial issues are deeper-rooted and you aren’t eligible for the scheme, you should speak to our team of initial advisors. We can provide you with free, impartial, regulated advice with no obligation, and help you decide the best way forward for your business.
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