New Coronavirus Business Interruption Loan Scheme (CBILS)
New Coronavirus Business Interruption Loan Scheme (CBILS)
Tuesday 21 April, 2020
The Chancellor has provided assistance for businesses through the New Coronavirus Business Interruption Loan Scheme (CBILS). Below is information relating to the scheme that is correct at 16th April 2020.
For the business owners:
- New Coronavirus Business Interruption Loan Scheme (CBILS): was announced by The Chancellor to provide finance for smaller businesses in the UK with cash flow and loss of earnings problems.
- CBILS is available through 43 Bank’s & lenders
- To be eligible, a business must be UK-based with less than £45m annual turnover
What is a CBIL?
- Up to £5m facility on repayment terms of up to six years.
- 80% partial guarantee, backed by the Government
- Interest and fees paid by Government for 12 months:
- Loan terms are up to 6 years for term loans & asset finance - 3 years for overdrafts.
- Businesses should approach their own bank first
- The banks are not allowed to ‘cherry pick’ applications – they must lend to all applicants.
What types of finance are available?
- Loans up to £250,000 do not need to be secured
- businesses will need security for above £250,000
- Term loans
- Overdrafts
- Asset finance
Coronavirus Job Retention Scheme (CJRS)
- https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme#when-your-employees-are-on-furlough
- All employers, including owner-managed businesses can claim from the CJRS.
- They will be ‘furloughing’ themselves.
- They can pay up to 100% of furloughed employee’s wages
- CJRS is subject to income tax and NICs.
- They cannot generate income, or work for their business
- They can continue to run the ‘back office’ - preparing accounts or paying bills.
