What is a CBILS Loan?

By Business Helpline

06 Dec 2022

The CBILS (Coronavirus Business Interruption Loan Scheme) was a government scheme designed to provide financial support during the Coronavirus pandemic to small and medium-sized businesses. It was announced in March 2020.

The Cbils loan scheme paid out a massive £26.39bn up to May 2021. There were 251,342 applications for the loan, of which 109,877 were accepted.

CBILS LOAN TERMS

The Cbils loans were designed for SMEs with a turnover of less than £45m. They provided finance of between £50,001 and £5m which included term loans, overdrafts, invoice, and asset finance.

In order for a business to apply for a Cbils loan, a business had to have been able to self-certify it had been negatively affected by the impact of Covid-19 to be eligible. However, public-sector bodies, state-funded primary and secondary schools, banks, insurers, and reinsurers weren’t allowed to apply.

There were over 90 accredited lenders for the Cbils loan and there was only a personal guarantee required for borrowing amounts of over £250,000.

The Cbils loan had to be paid over a period of 3 years for overdrafts and invoice finance facilities. And up to 6 years, for loans and asset finance facilities.

There was an option to extend these loans with some lenders to 10 years.

IS CBILS LAON THE SAME AS BOUNCE BACK LOAN?
The Cbils loan was part of the same Government package as the Bounce Back Loan, alongside the Coronavirus Large Business Interruption Loan Scheme (CLBILS). However, the Cbils loan was a different scheme.

Whereas the Bounce Back Loan Scheme loaned up to £50,000 the Cbils loan scheme loaned from £50,001 up to £250,000.

ARE CBILS LOANS STILL AVAILABLE?

No the loans closed for applications in March 2021. They were essentially a loan package available to support businesses struggling with the impact of the Covid-19 pandemic.

CAN YOU HAVE MORE THAN ONE CBILS LOAN?

Businesses were only allowed to apply for one Cbils loan and they weren’t allowed to apply if they had an existing Bounce Back Loan or CLBILS.

CBILS INTEREST RATES

The Government guaranteed 80% of the finance to lenders and paid interest and any fees for the first 12 months of the loan.

After this period the loans were charged at 3.49% over the Bank of England base rate for loans up to and including 3 years.

For loans over the period of 3 years, they were charged at 3.99% over the Bank of England base rate.

CAN I REPAY MY CBILS LOAN EARLY?

Yes, there is the option for early repayment and there is no early repayment fee. This is a great option to save you money on interest payments.

WHAT HAPPENS IF I CAN’T REPAY MY CBILS LOAN?

If you can’t pay back a Cbils loan this often denotes greater problems within a business so you may need to look at alternative options.

Businesses are held liable for Cbil loans throughout unless the company enters a liquidation.

If you can’t pay back your Cbils loan we offer confidential, expert advice to company directors. We’ll talk through your individual circumstances and help you find the best solution for you and your business.

You can contact Business Helpline by email at [email protected] or call us on 0800 088 2142.

Our highly trained experts have over 60 years experience and have helped thousands of company directors just like you. 

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