The CBILS is a loan scheme created by the UK government to help businesses, especially SMEs, combat the impact of the coronavirus pandemic. It offers this loan through partnerships with various financial institutions. Keep reading to find out all you need to know about securing your CBILS before the deadline.
This refers to the Coronavirus Business Interruption Loan Scheme. It is a scheme created by the United Kingdom government to aid businesses affected by the coronavirus pandemic. This scheme offers monetary support to ensure that businesses can stay afloat.
This scheme is offered in partnership with various lenders, with hundreds of lenders already accredited to provide the CBILS loan. These CBILS lenders have issued over £18.5bn in loans to almost 80,000 facilities as of November.
The CBILS is distinct from traditional loans for a number of reasons. First, there is no obligation to make any repayment during the initial 12 months of the loan duration. Also, the government is responsible for the upfront fee and interest associated with the CBILS loan. This ensures that businesses can find it easier to cope with the realities of the pandemic.
Current Deadline for the CBILS
It is worth noting that there have been a number of deadlines before this current deadline. The government continues to extend the deadline to cater for the needs of the growing number of businesses affected by the pandemic. But as of now, applications for the CBILS loan are scheduled to end on the 31st of January 2021. As such, businesses interested in CBILS must apply for the loan within this period, especially as a further extension of the CBILS deadline is unlikely.
How to Apply for CBILS
Accessing the loan requires making an application to the concerned lending institution. However, it’s important to confirm that your business is eligible for the loan before you apply. The criteria for eligibility are as follows:
The interested business must have its business activities centred in the United Kingdom.
The business must have suffered negative impacts due to the coronavirus pandemic.
The loan must be required for business purposes, although the need doesn't have to be imminent.
A minimum yearly turnover of £200,000 in the previous year.
The business turnover must be less than £45 million.
At least 50% of the turnover must be from trading rather than investment activities.
In a case where a business qualifies as eligible, the application procedure for the CBILS is as follows:
Identify a Lender
Apply to the lender for the CBILS loan
The lender decides whether to offer the business the CBILS loan
Applicants are allowed to apply to other lenders if a particular lender refuses them
Benefits of the CBILS Loan
The coronavirus business interruption loan scheme offers several benefits to business owners, including:
Absence of Initial Cost: A standard loan usually comes with application fees and other up-front costs. This also extends to the obligation to pay interest. However, with CBILS, businesses can obtain the loan without having to worry about this cost.
Access to Safety Net: Generally, traditional loans require that the business must need the loan. However, with the CBILS, this is not the case. There is no requirement that the business must urgently need the money, rather they may secure a CBILS loan in case of future difficulties. The goal is to ensure that businesses can enjoy a safety net following the difficulty that has come with the pandemic.
Accessible: The CBILS loan scheme further stands out, thanks to its accessibility to businesses. This CBILS loan has various criteria that make it accessible to a wide range of businesses, such as its availability to businesses across several industries.
Multiple Lenders: The CBILS loan scheme also comes with a wide variety of lenders. This allows businesses to enjoy multiple options to access the loan. For instance, there are at least a hundred accredited CBILS lenders. Also, businesses can opt for other CBILS lenders when a lender fails to approve a loan.
The CBILS offers businesses a chance to wade through the difficulties caused by the coronavirus pandemic. If they must enjoy its many benefits, interested businesses must send in applications before the deadline, 31 January, 2020.
We Can Help
GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.