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Coronavirus Business Interruption Loan Scheme

MARCH 2020 // PREPARED BY SMY Associates 

Coronavirus Business Interruption Scheme (CBILS) 

At Budget 2020, the Chancellor announced that a ‘Coronavirus Business Interruption Loan Scheme’ (CBILS) would temporarily replace the Enterprise Finance Guarantee (EFG). 

It will operate in a similar way to EFG and provided by the British Business Bank but will offer more attractive terms for both businesses and lenders, to support the continued provision of finance to UK businesses during the Covid-19 outbreak. 

Facilities Included: 

Loans Overdraft facilities Invoice Finance Asset Finance 

What is The Coronavirus Business Interruption Loan Scheme (CBILS)?

The British Business Bank’s CBILS facilitates business finance to smaller businesses that are eligible for funding, but unable to obtain finance due to having insufficient security to meet the lender’s standard requirements. 

The borrower (you) always remains 100% liable for the debt.

In this situation, CBILS provides the LENDER ONLY with a government-backed 80% guarantee against the outstanding facility balance, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’. 

Is my business eligible for the CBILS? 

To apply to a lender that’s backed by the
CBILS’ your business must:

  • Be trading more than 2yrs
  • Demonstrate maintainable turnover
  • during the current crisis
  • No adverse or CCJ’s

Eligibility Restrictions

There are a some sectors not eligible for
CBILS backed loans

  • Agriculture
  • Education
  • Freight and Transport·
  • Travel and Tourism

What our experts say?

We believe the government have potentially confused the SME community with their statement that they will be ‘issuing £330bn in government-backed loans’. This design of this initiative is to stimulate and maintain lending, borrowing and investment only. It is not to protect the borrower in any way; purely to protect the lenders only! 


Should I wait for the government to finalise their plans to give out their loans?

They already have. The process (previously as the EFG scheme) has been in play for many years already. 

Will I be eligible if I have to close my business for a few weeks or months?

Your eligibility will depend on the funder, they will take hundreds of variables into account. 

Does this mean I don’t have to pay back 80% of the loan?

No. The scheme only protects the lender, in the instance you default. You will be 100% liable for the debt. 

Does this make me more likely to obtain finance?

Yes! – That’s what it means. The scheme incentivises the lender to take more of a chance. However, you still need to demonstrate a viable business. 

Are credit ratings and affordability still considered?

Absolutely. The process of underwriting and obtaining finance is exactly the same as its always been. 

What happens if I default on my loan?

Lenders will ask for a Personal Guarantee, which means if your business goes into administration, they can pursue any personal assets. 

What now? – Speak to an expert! 

We are more dedicated than ever to help businesses navigate these tumultuous times and access the funding they need when they need it most – we’ve got your back! 

We have robust contingency and business continuity plans, and as a tech business we are no strangers to remote working. Our agents are always available, when you need them – give us a call on 020 3371 1110 or email [email protected]

You are also able to view your credit score and available options 24/7 via our websiteas well as the online client platform;

We want to assure you that looking out for British Business is what we do best, and we are working with our lenders to ensure we don’t miss a beat – we won’t let you down! 

SMY ASSOCIATES has a growing reputation as one of the region’s most effective accountancy firms for individual clients and businesses. we can offer you support that you can rely on both with standard matters concerning your enterprise and complex business management assignments. We thus value highly the loyal consultancy of our clients. Quality consultancy based on experience: learn all about our firm’s philosophy, priorities and tradition.

As a mortgage is secured against your home or other property, it could be repossessed if you do not keep up the mortgage repayments.