Ram Tumuluri - Coronavirus loans
15
Mar

UK Small Business Loans For Coronavirus Business Interruption

Ram Tumuluri “As a result of the COVID-19 outbreak, the Coronavirus Business Interruption Loan Scheme (CBILS) offers financial assistance to small businesses (SMEs) and start ups around the UK that are losing sales and having their cash flow disrupted. The scheme is part of a wider policy funding program for UK companies and workers. CBILS is being managed by the British Business Bank through its approved lenders. There are currently more than 40 lenders working to provide funding to SME’s who are suffering as a result of the COVID-19 Virus.”

What companies are eligible for the CIBLS?

The main goal of the Coronavirus Business Interruption Scheme (CIBLS) is to support viable companies to survive a shortened trading time as a result of the Coronavirus pandemic. Businesses wanting to be accepted would need to show that they can be competitive in environments without the pandemic in the short to medium term. 

To certain companies, this may be a grey area, particularly those that are start-ups with trading in less than a year. In addition, lenders are now seeking at least £ 100,000 in revenue or an annual wage bill above £ 12,500 in 2019. Businesses will be disqualified if their annual income reaches £ 45 m and over the past three years, they have received State Assistance. Sectors of fisheries, aquaculture, and agriculture are exempt from the program. Businesses can borrow up to 25 percent or twice their annual wage bill published in 2019. The minimum value of the loan is £ 25,001, and the maximum amount is £ 5 m.

Main features of the CIBLS 

CIBLs include loans, asset funding, invoice funding, and overdrafts. Main features of the Scheme’s loans are as follows:

  • Lend from £ 25.001 up to £ 5 m
  • Loan terms range from one to six years
  • Limited or no payments for arrangements (check with your lender)
  • No first 12 month payments
  • For most cases, no early interest charges (check with your lender)

What should businesses do that are not eligible for CIBLS?

Businesses which do not qualify for CIBLS may still apply under the lender’s standard terms for a business loan or commercial mortgage. There are also invoice financing solutions for easily releasing cash flow or asset funding for greater amounts of money under standard terms.