CORONAVIRUS BUSINESS INTERRUPTION LOAN SCHEME

Government-backed loans to support businesses

During these unprecedented times, businesses are facing significant challenges to revenues and cashflow. We want to reassure our clients that we are here to help support them.

One of the most important government measures to support small and medium-sized businesses is the Coronavirus Business Interruption Loan Scheme (CBILS). We have reached an agreement with the British Business Bank to become an accredited provider of that scheme to our SME clients.

Smaller loan applications between £2,000 and £50,000 fall under the criteria of the Bounce Back Loan Scheme (BBLS), which we do not currently offer. However, we are urgently reviewing whether we can provide a solution to support client applications, and will update this page with further information should we become a provider. In the meantime, please do speak to your Banker to explore alternative options that may be available.

 

 

What is CBILs?

CBILS is a government-backed scheme that provides financial support to viable SMEs that are losing revenue and experiencing cashflow pressures because of the coronavirus. The loans are available for terms of up to six years and include a standard 12-month capital repayment holiday. The first 12 months are interest free as the government pays the interest for you during that time.

The scheme is designed to support businesses that were trading successfully before coronavirus but now face difficulty as a result of the current disruption.

The UK government provides banks with a guarantee for 80% of the loan, but the borrower remains liable for 100% of the outstanding debt.

 

WHEN CAN I GET A LOAN THROUGH CBILS?

We are now accredited with the British Business Bank and are taking applications, please see the HOW TO APPLY tab for details.

All clients who apply will need to pass eligibility checks and provide us with some information about their business.

 

WHICH BUSINESSES CAN APPLY?

UK-based businesses with total turnover of up to £45 million a year are eligible for the scheme. CBILS has been designed to ensure that appropriate government support can be provided within a short time-frame to help businesses manage the impact of the coronavirus outbreak.

It is available for new lending requests only, made directly as a result of the coronavirus impact, and will not cover existing facilities we may have agreed with you under normal banking terms and conditions before the Covid-19 outbreak.

 

DOES IT APPLY TO ALL SECTORS?

Almost all business sectors can access CBILS. Some different terms will apply for a small number of areas, including for some agriculture and aquaculture businesses.

The following are excluded:

  • Banks, insurers and reinsurers (but not insurance brokers)
  • Public sector bodies
  • Further education establishments, if they are grant-funded
  • State-funded primary and secondary schools

 

HOW MUCH CAN I BORROW?

We can provide CBILS-supported loans for amounts ranging from £50,001 to £5m. Any lender levied fees that may apply in the first year will be paid by the UK Government.

HOW LONG DO I HAVE TO PAY THE LOAN BACK?

CBILS loans are available for terms of up to six years and include a standard 12-month capital repayment holiday. The interest over the first 12 months is paid by the government, and there is no penalty for early repayment.

 

CAPITAL REPAYMENT HOLIDAY AND INTEREST-FREE PERIOD

The UK government will pay interest for the first 12 months of the agreement. You will not have to make any capital repayments during the 12-month capital repayment holiday. This means more capital will be outstanding for longer, so you will pay more interest over the full term than if you do not take the capital repayment holiday. You may make extra capital repayments, which would reduce the overall interest costs over the full term.

 

SECURITY REQUIREMENTS

Lenders are expected to follow their normal security requirements.

We have decided that we will not seek new, or increased, personal guarantees for any debt requested under the scheme. This goes above and beyond the UK government’s requirement that guarantees are not sought for debt requests of up to £250,000.

Any security required will be restricted to business assets only.

These arrangements will have no impact on any existing debt facilities we may have agreed with you, which will continue on the same terms.

 

HOW LONG WILL CBILS BE AVAILABLE?

CBILS will remain in place until the end of September 2020, but this may be extended by the government which has said there is no maximum limit set for the amount of total lending supported through the scheme.

There is therefore no immediate need to approach lenders if you do not need finance in the short term.

 

WHAT OTHER FORMS OF GOVERNMENT SUPPORT ARE AVAILABLE?

Please see the government support website for details

 

 

IS MY BUSINESS ELIGIBLE?

To be eligible for CBILS, your business must:

  • be UK-based, with group turnover of no more than £45m per annum
  • generate more than 50% of its turnover from trading activity
  • be applying for business purposes and primarily to support trading in the UK
  • operate within an eligible industrial sector – there are a considerable number of sectors eligible to participate but a small number are not
  • be considered viable over the longer term, notwithstanding any coronavirus impacts over the short-to-medium term

For more information, please visit the British Business Bank website or our own Coronavirus Hub.

Please note that Adam Commercial provides business banking facilities to the private clients of Adam & Co.

Whilst we are doing everything we can to help all of our clients, given the huge demand for CBILS from our existing business clients, we are unfortunately unable to take applications from new commercial clients at the present time.

We will reassess our capacity regularly, but if your current bank is offering CBILS, it will be faster for you to apply through them.

 

 

HOW TO APPLY

Please download this brochure which provides additional details about the scheme as well as three forms you will need to complete:

1.       A ‘Fact Find’ form to assess business performance

2.       An application form to provide further details about the business and the funding needed

3.       Data disclosure to grant permission to share information with the British Business Bank

 

WHAT WE NEED FROM YOU

All accredited lenders are required to assess each application to ensure that the business applying is viable and has the potential to trade out of any short-term or medium-term difficulty.

We are also required to confirm that the purpose of the debt request is for a suitable business purpose and meets the intention of the CBILS scheme.

To support this, you will need to provide the following information, plus anything else that may help us assess your application quickly:

  • your last set of audited accounts, if applicable, including balance sheet and profit & loss statements
  • your most recent management accounts, ideally covering the 2019 performance year
  • a brief update on the performance of your business before the onset of the virus
  • a cashflow forecast showing how much you need to borrow looking ahead at least 12 months

The cashflow forecast should demonstrate the impact of any other liquidity remedies on offer, including the Job Retention Scheme, rates relief and VAT deferral, and any capital repayment holidays agreed on existing loans.

This cashflow forecasting tool may be helpful.

  • your business plan and/or any key assumptions or risk factors which may impact the above
  • details of the business assets you own, schedules of hire purchase or third-party finance commitments (including current balances, repayment commitment details and expiry dates)

Using this information, we will assess whether the amount requested is in line with the trading history of the business and reflects the expected period of disruption, which we are currently taking to be three-to-six months.

We will base your business performance in 2021 and 2022 on your performance before the onset of coronavirus. We will need you to outline any longer-term impacts which may mean this is not appropriate.

 

 

Ready To Apply?

Please download the forms you will need to complete:

1.  A ‘Fact Find’ form to assess business performance

2.  An application form to provide further details about the business and the funding needed

3.  Data disclosure to grant permission to share information with the British Business Bank

 

There are several ways to sign the documentation and return it to us:

 

  • Complete the documentation by typing directly into the form fields using Adobe Acrobat Reader. If you don’t have this software you can download it for free here.  
  • Scan or take a photograph of the completed documentation, which you have ‘wet ink’ signed.
  • Send the document to your banker via our secure messaging service within Adam Online (details of how to do this can be found here). Alternatively, if you are not registered for Adam Online, please email it to your banker.   
  • If you are unable to ‘wet ink’ sign the documentation, please include the following wording within your secure message or email:

Please find attached the CBILS application form, fact find and data disclosure. By this email, I confirm that:

I am duly authorised to sign the Documents on behalf of [insert name of signing entity]

By sending you this email and by inclusion of my full email signature footer below, you may consider the Documents to be duly signed and executed for and on behalf of [insert name of signing entity] for all purposes.

If you have any queries, or are having any problems completing this form, please contact your private banker.

Security may be required. Over 18s only. Business use only. Subject to status. Exclusions may apply.

Any property or asset used as security may be repossessed or forfeited if you do not keep up repayments on any debt secured on it.