The Government has announced the Coronavirus Business Interruption Loan Scheme, (CBILS) to make loans available to qualifying businesses across the UK

The scheme will initially run for six months.

Eligible businesses

Businesses are eligible for CBILS if they are:

• UKbased;
• have an annual turnover of no more than £45 million;
• operate within an eligible industry sector (effectively all businesses except from  banks, building societies, insurers and reinsurers (but not insurance brokers); the public sector including state funded primary and secondary schools; employer, professional, religious or political membership organisation or trade unions)
• generate more than 50%of its turnover from trading activity:
• importantly, were it not for the pandemic crisis, their loan application would be considered viableby the lender, and the lender believes the provision of finance will enable the business to trade out of any short-to-medium term difficulty.
• are sole traders and freelancers, provided business activity is operated through a business bank account.

Types of finance

The types of finance available will depend on each lender – as not all forms of finance will be made available by all lenders  – but will include:

• Term loans
• Overdrafts
• Invoice finance
• Asset finance

Key aspects

• This is a loan – not a grant – and the borrower will still be liable for 100%of the debt.
• The Government will cover the first 12 monthsof interest payments and any lender-levied fees, so it will be cost-free for the first year.
• The maximum value of a facility provided under the scheme will be £5m, available on repayment terms of up to six years. For overdrafts and invoice finance facilities, terms will be up to three
• Loans in the scheme are limited to a maximum of 25%of 2019 turnover or double the annual wage bill, whichever is greater.
• The lender may permit the scheme be used for unsecured lending for facilities of up to £250,000. For facilities above £250,000, the lender must establish a lack or absence of security prior to using CBILS.

For further information, please contact Tony Castagnetti (tony.castagnetty@belluzzo.net) or Ezio La Rosa(ezio.larosa@belluzzo.net) who will be able to assist you on your eligibility to CBILS and to support your application with business plan and financial projections for the benefits of the lenders.