In addition to our article, Everything You Need To Know About CBILS, we would like to give you further detail on eligibility for the scheme.

To be eligible for the Coronavirus Business Interruption Loan Scheme the following criteria must be met:

  • The loan must be used for business purposes
  • The business must have an annual turnover of no more than £45 million
  • It must be UK based in its business activity
  • The business must generate more than 50% of its turnover from trading activity

However, following the initial release of the scheme it became clear that other criteria such as good business stability were also required – defeating the purpose of the loan scheme which is to support businesses in crisis due to the Coronavirus pandemic.

New Confirmed Eligibility Criteria

Following sustained criticism from the DMA and other industry partners who have written to share their negative experiences with their banks when applying for loan via the Coronavirus Business Interruption Scheme (CBILS), the Government has announced changes to eligibility criteria.

Across the board, members were shocked by the personal guarantees and interest rates they were asked to agree. Many members who were asked for personal guarantees shared correspondence from Lloyds, Barclays and HSBC, in particular.

As a result, on Friday, the Government announced that they would remove the requirement for personal guarantees for loans under £250k. However, the DMA has been in contact with BEIS, DCMS and the Treasury to push for more gives from the government.

The following measures have been taken as an advance on the initial eligibility criteria:

  1. The removal of personal guarantees for CBILS under £250k (as announced on Friday)
  2. Where loan requests between £250K to the £5m cap, the personal guarantees will be limited to 20% of the total loan, as the govt will assume the remaining 80% of the risk
  3. The removal of the requirement to demonstrate business has no other means of funding
  4. The removal of the option to offer the banks’ own commercial alternatives over the CBIL as the first available option
  5. A warning for banks not to charge excessive interest after the free period – banks will be asked to assure customers of a modest ‘reversion rate’
  6. An announcement of £4 billion support for charities

These are welcome changes, though personal guarantees of 20% of loans from £250k-£5m still expose SME owners to a great deal of risk.

To find out more about the types of lending available and how we can help CLICK HERE.

Other items of interest: Should I take a personal loan and give the funds to my business?

Please note: Ringrose Business Finance is a business finance brokerage, however, we are not able to broker a business loan provided in line with the Coronavirus Business Interruption Loan Scheme (CBILS), neither are we able to give you specific CBILS financial advice. The information provided here is designed as a guide to help you. Please do not solely rely on the information provided on this page.

Who can help you?

For advice you should should speak to an accredited financial advisor or lender, Government body or accountant (as noted above). To find your own accredited lender or partner, talk to us or visit the Accredited Lenders and Partners page published by the British Business Bank.

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