New data released from the British Business Bank reveals that 7,700 loans worth over £2bn have been offered to SMEs across London under the Coronavirus Business Interruption Loan Scheme (CBILS). The scheme provides business loans, overdrafts, invoice finance & asset finance of up to £5m to businesses with a turnover less than £45m.
Including the Government-backed bounce back loan scheme London businesses have received £9bn of loan offers. The Construction sector has received highest proportion of total loans (17%), followed by Wholesale and Retail (16%).
What is CBILS?
CBILS was launched to support small businesses impacted by the coronavirus pandemic. You can apply direct to participating lenders for facilities of up to £5m. The scheme is for businesses who are experiencing lost or deferred revenues, leading to disruptions to their cashflow.
What can CBILS fund be used for?
The Coronavirus Business Interruption Loan Schemes is designed to support UK businesses that are losing revenue and seeing their cashflow disrupted as a result of the COVID-19 outbreak. The scope is quite broad as most businesses have been impacted in some way. CBILS funding can therefore be used for:
- Plugging a hole in your working capital
- Creating new business opportunities (including purchasing premises or taking on new contracts)
- Refinancing invoice finance or loan facilities (including Bounce Back Loans) to free up cash to support the business
Am I be eligible for CBILS?
To meet initial eligibility criteria small businesses must:
- Be UK based, with turnover of no more than £45 million per annum.
- Have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender. The lender must see that the provision of finance will enable the business to trade out of any short-to-medium term difficulty.
- Lenders are usually limiting loans to a maximum of 25% of 2019 turnover or double the annual wage bill, whichever is greater. Some lenders will rely on cashflow forecasts to prove a greater need in some cases.
More information on the CBILS scheme can be found here.