Who should apply for a Coronavirus Business Interruption Loan Scheme or CBIL and how do you go about it?

CBILS is suitable for SME business with several years trading seeking funding over £50,000. Your business should have been trading profitable before the current crisis and you will need a basic business plan, showing youcan afford to repay the loan once the crisis is over.   Under the scheme the government guarantee can be used to secure both overdrafts and term loans, you can also use it secure asset based financing for your business.  Remember that any loan or facility will be interest free for 12 months but the interest rate may be slightly higher than normal after that.

4 Oceans Capital has set up a free consultation service to help SMEs understand what support they can expect to receive and how to apply for CBILS Loans. If you want a free consultation make an enquiry using the form on this page.

If you want to go it alone here is a short summary of what you’ll need to consider to make a successful application.

• You’ll need to consider just how much cash you need to “keep the lights on” for at least the next 6 months. As a rule, the banks will not lend any more than 25% of last years turnover or double last years wages bill, whichever is higher, under the CBIL Scheme.  So don’t ask for more than that when preparing your cash flow. You need to take into account any other government support you are eligible for including Rates Grants, Job Retention Scheme etc.  Once you have your cash requirement add some on for contingency you may need more than 6 months to get through this.
• How much to apply for. Most banks will now not offer CBILS loans for anything less than £50,000. If you need less than £50,000 you should really apply for a Bounce Back loan.
• You’ll need a basic business plan which explains what your business does, how it has been impacted by COVID-19 and what you are going to use the money for.
• You’ll need a minimum of 1 years full accounts (preferably 2 years or more) plus Management accounts till end of March.
• You’ll also need aged debtors and creditors lists, details of any other debt in the business, how much is left to pay and who it is with, eg Credit cards etc and details of all of the directors or owners in the business.
• You need to speak to your bank as soon as possible, many banks have implemented a call back scheme, use this schemes, go online and request a call back and use the time to prepare the information above.
• If you are in severe cashflow difficulty now you need to speak to your bank asap, so unfortunately you will have to wait on the phone.

If you follow the steps above we are sure you’ll get the support you need, but if your existing bank doesn’t offer CBILS loans or other facilities or you have been refused you need to speak to your accountant or someone like us asap.

If you want to learn more about the Coronavirus Business Interruption Loan Scheme, you can download our guide here.