UPDATED April 2021 – Please click here to read the latest version of this article.

Last week we published an overview of the £350 billion package unveiled by the government to provide support for UK businesses in response to the Coronavirus pandemic. One of these measures is the Coronavirus Business Interruption Loan Scheme (CBILS) which went live on 23 March 2020 and provides loans for smaller businesses facilitated by the British Business Bank. We examine some of the key features of the Scheme and some practical suggestions if you are considering applying.

What are the key features of the scheme?

It is important to note that applicants would still make applications through their preferred finance provider, who in turn deals with the British Business Bank. CBLIS is all about encouraging lenders to continue to advance funds to their customers.

As examples, these are the entry pages to the Scheme for the four traditional High Street Banks.





The maximum amount businesses can borrow, through term loans, overdrafts, asset finance and invoice finance, has increased significantly since it was first announced, from £1.2 million to £5 million. However, it is important to note that not every lender will be able to provide every type of finance listed. Please refer to your provider’s website for further information.

The scheme will operate through participating lenders and the government will partially guarantee up to 80% of the facility, subject to an overall cap per lender. The CBILS guarantee is to the lender bank and not the business, therefore the borrower is 100% liable for the repayment of the facility under this scheme (not just 80% as has sometimes been wrongly reported/interpreted).

Lenders will pay a fee to access the scheme but there is no charge for SMEs (other than the usual bank fees payable for the facility).

The government will cover the first 12 months of interest payments and some lenders have indicated that they will not charge arrangement fees or early repayment charges to SMEs that make use of the scheme.

For term loans and asset finance, the term of the facility can be up to six years and for overdrafts and invoice finance facilities, terms will be up to three years.

Am I eligible to apply?

To be eligible to participate in the CBILS, the borrower must:

  • be UK based with a turnover of no more than £45 million per annum;
  • operate within an eligible sector
    • excluded sectors include but are not limited to banks, building societies, insurers, state funded primary and secondary schools, trade unions etc.
  • have a sound borrowing proposal which, were it not for the economic disruption caused by COVID-19, would have met the lender’s normal requirements and still be viable long term.

How can I access the scheme?

  • CBILS is available through the British Business Bank’s 40 accredited lenders, which are listed on the British Business Bank website here.
  • Businesses should approach their own provider in the first instance. Demand for this loan will be high so SME’s are advised to apply with lender’s online rather than going to a branch or cold calling.
  • If you are unable to access the finance you need from your usual lender, you should then consider approaching other lenders.
  • In your borrowing proposal you will need to evidence that you have a viable business and that the provision of finance will enable your business to recover from any short-to-medium term difficulty caused by the current crisis.

Points to note

  • The scheme will initially run for six months.
  • The government has confirmed that the funds under the scheme will not run out as it is very much demand-led.
  • The scheme is open to sole traders, freelancers, body corporates, limited partnerships, limited liability partnerships or other legal entities that carry out business activities in the UK.
  • Lenders are not required to take into account any other forms of government support that SMEs may be benefitting from so receiving other kinds of aid in response to COVID-19 will not prevent SME’s from accessing this scheme.

Haven’t I seen this before?

Another crisis, another business loan scheme. Following the last financial crisis over a decade ago, there was the launch of a similar loan scheme called Enterprise Finance Guarantee (“EFG”) which also aimed at facilitating lending to the UK’s smaller businesses.

Since the launch in 2009, the British Business Bank’s EFG Scheme has supported the provision of over £3.3bn of finance to more than 35,000 smaller businesses in the UK. At the Budget in 2017, the government announced it was extending the programme for a further four years, enabling the guarantee up to £2bn of lending over that time. As such, businesses may also look at loans under that Scheme.

Contact us

Further updates will be provided as more guidance emerges. If you have any questions or concerns about the above, please contact a member of the team using our website or your usual Fox Williams contact.

Further useful websites




Articles and commentary by our legal experts on the impact of COVID-19 are all available here.


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