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Now, for tomorrow
Coronavirus Business Interruption Loan Scheme (CBILS)
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Am I eligible? To maximise the support available, the Chancellor has Your business must:
1. Be UK-based in its business activity2. Have an annual turnover of no more than £45 million3. Have a borrowing proposal which the lender:
a) would consider viable, were it not for the COVID-19 pandemicb) believes will enable you to trade out of any short-term to medium-term difficulty
Businesses from any sector can apply, except the following:• Banks and building societies• Insurers and reinsurers (but not insurance brokers)• Public-sector organisations, including state-funded
primary and secondary schools
Guidelines as of 3 April 2020 (subject to change) To maximise the support available, the Chancellor has extended the Coronavirus Business Interruption Loan Scheme (CBILS) so that all viable small businesses affected by COVID-19, and not just those unable to secure regular commercial financing, will now be eligible should they need finance to keep operating during this difficult time.
The government is also stopping lenders from requesting personal guarantees for loans under £250,000 and making operational changes to speed up lending approvals. The government will continue to cover the first twelve months of interest and fees.
Larger firms with a turnover of up to £500m will also be eligible for more help. The revamped scheme will offer government-backed loans of up to £25m to firms with revenues of between £45m and £500m. Banks will also be banned from asking company owners to guarantee loans with their own savings or property when borrowing up to £250,000.
What is it?The Coronavirus Business Interruption Loan Scheme supports viable small and medium-sized businesses who have been disrupted by the COVID19 outbreak with the provision of debt finance through an approved panel of lenders.
The scheme was introduced to stimulate finance provision in the aftermath of the Coronavirus outbreak, with the British Business Bank (“BBB”) working alongside a panel of approved lenders to ensure support to viable businesses who require cash flow support.
Any business seeking support through this channel should liaise with their professional advisers and existing funders to make an application. As confirmed by the BBB, the scheme provides the lender with a government-backed guarantee against the outstanding facility balance, with an objective of enabling a ‘no’ credit decision from a lender to become a ‘yes’. Whilst the borrower always remains 100% liable for the debt, the Government will cover the first 12 months of interest payments.
What types of finance can the scheme be used to supplement? Scheme administrators can support requests alongside overdraft, working capital (including invoice finance), asset and term / loan facilities. Your lender may be limited as to what support can be provided due to the existing facilities in place.
How does it work?
How much can I apply for? The maximum value of a facility provided under the scheme will be £5 million, with further limitations imposed by the applicant’s ability to service and repay the requested finance. The provision of financial information which can demonstrate the ability to service the finance, including both historic results and forecast results, will therefore be a key piece of information which will need to accompany any application.
Click here to find out which funders are included in the scheme
How long can the finance be provided for? The length of any facilities provided by the scheme will be limited by a maximum of six years for term loans and asset finance and up to three years for working capital facilities and invoice finance.
What should I do next? MHA Tait Walker have significant experience in finance raising and have contacts across all major banks and funders.
We can offer support with any application process, whether through CBILS or more conventional sources, which will include the preparation of a suitable business application document with an attributable financial plan which lays out financial performance and the ability to service any requested finance.
MHA Tait Walker Finance Raising Team
BBB requests for applications to be made online in the first instance, with any request to be approved from the lender you approach.
Applicants are encouraged to approach new funders should their own bank be unable to support the request. MHA Tait Walker have contacts across all major lenders approved by the scheme.
How we can help youWe can assist to show your business that, were it not for the COVID-19 pandemic, your business would be considered viable by the lender.
We can help to show you have a proposition for which the lender believes the provision of finance will enable your business to trade out of any short-to-medium term difficulty.
Lee Humble, Associate PartnerLee is an ACA Chartered Accountant with over 15 years of experience in professional services and private company leadership roles. His background includes qualification through Big 4 talent channels and has previously worked for three banks, with a specialism in working capital. His recent roles have included Finance Director secondments across the UK for small, medium and large businesses operating with a range of financial stakeholders. He also has experience in accelerated marketing processes and cash flow management of companies in financial distress. Previously, Lee has raised finance through multiple government backed sources which include the EFG scheme and RGF grant schemes.
Graham Dotchin, Associate PartnerGraham has extensive experience in both professional practice and as an FD in industry. In professional practice, Graham spent most of his time in Corporate Finance, focusing on financial modelling, fundraising, and due diligence on behalf of investor and acquirers. In industry, Graham worked in high growth businesses and secured many rounds of investment funding to support business growth. Graham is now head of our Data Insight team, working with clients’ data to help businesses understand what drives value and using a range of financial modelling tools to create forecast models and assess strategy options through simulation analysis.
Disclaimer: the scheme rules may be subject to change and all applications will be subject to the individual lending criteria of the institution through which the application is made. MHA Tait Walker will provide updates on the scheme via our dedicated webpage (https://www.taitwalker.co.uk/insight/covid-19/ ) and via our social media channels.
Partners’ Roadmap
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taitwalker.co.uk
Tait Walker LLP trading as MHA Tait Walker is a member of MHA. MHA is an independent member of
Baker Tilly International Limited, the members of which are separate and independent legal entities.
Alastair Wilson Tax PartnerT: 0191 226 8411 E: [email protected]
Andrew Moorby Managing PartnerT: 0191 226 8399 E: [email protected]
Brian Laidlaw Business Services PartnerT: 0191 226 8329 E: [email protected]
Chris Potter Business Services PartnerT: 0191 226 8334 E: [email protected]
Graham Dotchin Data Insights Associate PartnerT: 0191 226 8420 E: [email protected]
Lee Humble Corporate Finance Associate PartnerT: 0191 226 8414 E: [email protected]
Mark Brunton Business Services PartnerT: 0191 226 8320 E: [email protected]
Mark Parkinson Wealth Management PartnerT: 0191 226 8378 E: [email protected]
MHA Tait Walker Partner Team
Paul Shields Business Services Associate PartnerT: 0191 226 8341 E: [email protected]
Simon Brown Business Services PartnerT: 0191 226 8319 E: [email protected]
Steve Plaskitt Corporate Finance PartnerT: 0191 226 8352 E: [email protected]