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What is the Coronavirus Business Interruption Loan Scheme (CBILS): What is my liability?

Please note, the CBILS scheme is no longer open to new applications.

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

The Government gave providers with a partial guarantee of 80% of the loan. This guarantee potentially enabled providers to lend to businesses that might not have previously been eligible for a loan, due to the effect coronavirus had on their business.

Please note, if you’ve taken out a CBILS loan, your business is liable for the full loan amount. If your business is unable to repay, the scheme provides a guarantee to the lender, not to your business.

CBILS also covered the first 12 months of interest payments and fees. This meant that businesses could benefit without upfront costs and lower initial repayments.

What is my liability for a CBILS loan? 

  • Your business is liable for the full loan amount. The Government provides a guarantee to the lender, not the business. In the event a business is unable to repay in full, we will follow our collections and recoveries process to try to recover the full loan amount. Only once this process is exhausted will the guarantee come into force
  • 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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