Last chance for CBILS
Almost 1.5m businesses across the UK have taken COVID-19 financial support and, now extended to 31 March, it’s time to organise a CBILS loan, writes Complete Commercial Finance’s Karl Lanham.
Christmas is just a few days away, but CBILS, a Government-backed business loan, with 80 per cent of the loan underwritten, the first 12 months’ interest and any lender charges paid for by the Government, could be a gift to start 2021.
2020 has been a truly ‘annus horribilis’ for many companies and as the days run out there will be those who are glad to draw a line under months of disrupted trading and the inevitable negative effect on the bottom line. The government’s financial support has been invaluable and HM Treasury recently announced that nearly 1.5m businesses have taken up the Bounce Back Loan Scheme (BBLS) and Coronavirus Business Interruption Loan Scheme (CBILS) to steady their finances.
CBILS supports those who are losing business or who have had their cashflow disrupted as a result of COVID-19. The product has evolved since it was first launched in March 2020, with changes to the scheme’s features and eligibility criteria. Initially offered through High Street banks, the scheme is very different today with a larger number of alternative lenders able to offer CBILS and, as with any type of lending, this widening broadens the opportunities for borrowing.
Now available to smaller businesses, security is no longer a requirement of the CBILS, meaning far more local companies have the opportunity to borrow up to £5m over five years, with no personal guarantees for lending under £250,000. Already extended twice, the opportunity to apply for a CBIL has been extended again to end on 31 March 2021.
With the exception of debt consolidation, a CBIL can be used in a variety of ways, including asset finance, a merchant cash advance, invoice factoring or simply to secure cashflow to cover staffing or supply chains. For one client, COVID-19 has created greater demand for their manufacturing business and a CBIL has enabled the company to improve its supply chain. For another, a CBIL allowed a company to make its busy workspace COVID-safe.
Businesses can have multiple CBILs with a number of different lenders, which provides additional opportunities for funding, and companies can apply for the CBILS even if they have already received a BBLS loan, providing they repay the latter in full.
With the expansion of the CBILS scheme, there is a strong appetite among lenders to support many business scenarios and there is a wide variety of terms to suit different companies’ needs. However, finding the right lender with the right terms can be difficult and time-consuming, which is where working with a professional broker such as Complete Commercial Finance can pay dividends to identify the point of difference between various schemes and find the right product for your business.
Working with many local businesses, I have been impressed by the resilience of so many firms who have adapted their operations during the pandemic. We are proud to play a part in helping companies to organise and secure the funding they need to weather tough times. If you are finalising your plans for 2021, now is the time to get in touch – we look forward to helping you take care of your finances for better years ahead.
