The Coronavirus Business Interruption Scheme (CBILS) is a Government-backed scheme designed to support SMEs and to help them access finance to help them through this unprecedented time.
Ignition Credit are part of the STAR Asset Finance Group and we are pleased to announce that within our group, we now have accreditation from the British Business Bank to offer the CBILS scheme for asset finance.
This means that we are now able to provide CBILS funding from our Groups own resources, as well as acting as a broker to our CBILS accredited funder panel – allowing us to make decisions quicker to get much needed funding in-place for businesses before the deadline of 31st March 2021.
Since the launch of the CBILS scheme, we have so far assisted our clients access more than £20million of CBILS backed funding, from loans, asset finance hire purchase and asset refinance.
CBILS Key Facts
- Advances between £5,000 and £1m for Asset Finance and Hire Purchase
- Between 50,001 – £3m for Business loans
How can I check whether I’m eligible for CBILS support?
If you can answer “yes” to all of the following questions, you may be eligible for CBILS. All decisions are subject to credit decision:
- Is your enquiry for finance as a result of being impacted by coronavirus?
- Are you a small or medium-sized enterprise with a turnover of less than £45m?
- Does, or will, your business generate 50% or more of its income from trading activity?
- Is your business based in the UK, and will the funding be used to support trading in the UK?
- Is the main reason for seeking finance to support investment, increase working capital, fund business growth or acquisitions?
- Are you applying for finance in Pound sterling (GBP)?
Are there any restrictions to which businesses can apply for CBILS?
- Under the scheme, the Government provides a guarantee to the lender. It’s important to note that you remain liable for 100% of the outstanding debt. Where defaults occur, we follow our standard commercial recovery procedures, including the realisation of security, before we make a claim against the Government guarantee for any shortfall.
Businesses from the following sectors cannot apply:
- Banks, Insurers and Reinsurers (but not Insurance Brokers), Public-sector bodies, Further-education establishments if they are grant funded, State Funded Primary and Secondary School
- CBILS advances of £30,000 and above, are only available to borrowers who are not an “Undertaking in Difficulty” as at 31 December 2019 under Article 2 (18) of the Commission Regulation (EU) No 651/2014 (17 June 2014), examples of which are:
- businesses that have accumulated losses greater than half of their subscribed share capital, or
- businesses that entered into collective insolvency proceedings or fulfilled the criteria to be put into collective insolvency proceedings, or
- businesses that have previously received rescue aid that is yet to be reimbursed or restructuring aid and are still under a restructuring plan.
FAQs for SME’s from the British Business Bank HERE
British Business Bank PLC is wholly-owned by HM Government and is not authorised or regulated by The Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). The Coronavirus Business Interruption Loan Scheme (CBILS) is managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy, and Industrial Strategy (BEIS).
T&Cs will apply, subject to status and affordability. Any asset used as security may be at risk if you do not repay any debt secured on it.
Some of our most frequently asked questions:
Can I apply for a CBILS Loan if I’ve already had a Bounce Back Loan?
You can’t have both live at the same time. However, some lenders are happy to agree a CBILS facility with the condition of repayment of the bounce back loan.
Can I have more than one CBILS product?
You can take several CBILS loans with different providers, providing the total amount you borrow is no more than 25% of your turnover, double your annual wage bill, or enough to cover liquidity needs for 18 months from the date of borrowing. The total CBILS amount cannot be higher than £5m.
Do I apply via my Bank?
When CBILS loans were first introduced back in April, they were initially offered by banks only, which is why many SME owners believe that this is the only place you can get them. However, as the backlog of applications built-up and waiting times for a response grew, the Government introduced a raft of accredited lenders who were able to offer CBILS facilities for Loans, Hire Purchase and Asset Finance facilities.
While the standard CBILS offering includes benefits such as the Government paying the first 12 months of interest and upfront fee on your behalf, as well as no personal guarantees on loans up to £250,000, other lenders are able to offer 12 months deferred repayment terms and have no early settlement fees.
Do CBILS loans require a personal guarantee or security?
As part of the CBILS loan scheme, the Government requires that personal guarantees are not required on loans under £250,000.
On amounts above £250k, you may be asked to give a debenture on your business as the personal guarantee is only attached to 20% of your outstanding loan amount.
Are CBILS loans expensive?
A CBILS loans can actually work out to be more cost effective! The Government pays the first 12 months of interest (where interest is typically at its highest) and upfront fee on your behalf. This could save you hundreds, if not thousands of pounds in comparison to a non-CBILS business loan.
And with no early settlement fees, if you repay your loan in full before the end of your first year, it won’t have cost you anything.
How long does the process take?
Because of the early press coverage on extended waiting times for CBILS application to be processed, many small business owners presume that CBILS loans generally take a long time to approve. This is not the case — in the last six months we have processed hundreds of CBILS applications and on average can give you an approval in 24 hours!*
*24 hour turnaround as an average, if applied during normal office hours.