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What is the Coronavirus Business Interruption Loan Scheme (CBILS): Is my business eligible, how do I apply and what is my liability

The Coronavirus Business Interruption Loan Scheme (or CBILS) is a government initiative for small businesses across the UK who have been affected by coronavirus. Through this scheme, UK SMEs will be able to access finance to help with cash flow during this period.

The government provides Funding Circle with a partial guarantee of 80% of the loan. This guarantee potentially enables Funding Circle to lend to businesses that might not have previously been eligible for a loan, due to the effect coronavirus has had on their business.

Please note, when taking out a CBILS loan, the business is liable for the full loan amount. If the business is unable to repay the scheme provides a guarantee to the lender, not to the business.

CBILS will also cover the first 12 months of interest payments and fees. This means that smaller businesses can benefit without upfront costs and lower initial repayments.

You can read more about CBILS on the British Business Bank’s website.

Is my business eligible?

When assessing your loan application, we consider whether you would have been approved under normal circumstances, were it not for the impact of coronavirus.

You also need to meet the following criteria to be eligible for a CBILS loan with Funding Circle:

  • UK-based business that’s been adversely affected by coronavirus
  • Turnover of up to £45 million
  • 3 years of trading history
  • Over 50% of turnover from trading activity (e.g. not from investments)
  • Loan is for business purposes
  • Loan primarily for trading in the UK

How do I apply for CBILS?

You can apply for a CBILS loan using our online form. We’ll then ask you to send us some documents so we can assess your application.

What documents do I need to apply for a CBILS loan?

After you have completed our online form, you’ll need to send a few documents to finish your application. We may require:

Business bank statements for the last six months

They must show:

  • The Account name and (where possible) the registered address. These must match the business you create the loan application for.
  • The sort code and account number.
  • All daily transactions.
  • A history of a minimum of six months (with the most recent being within one month of your loan application date). If you can select an exact date range, be as up to date as possible.

Latest full unabbreviated accounts

This must include:

  • Profit and loss
  • Detailed profit and loss
  • Balance sheet information

What is my liability for a CBILS loan? 

  • Your business is liable for the full loan amount. The Government’s guarantee is not provided to you and we can only claim under the guarantee once we have exhausted our usual collections and recoveries process and you are unable to repay the loan 
  • If you miss four contractual payments (i.e 90 days late from the date of your first missed repayment) then we will need to default the loan
  • Defaulting a loan is always a last resort for us, as this will adversely affect your business’s credit rating
  • We will stay in contact with you throughout this period to help you with managing the arrears and will look to explore all other available options with you before reaching this stage
  • If we do have to default the loan, then we will seek full repayment of outstanding principal and contractual interest from the business
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