COVID-19: How can I improve my chances of being accepted for CBILS finance?

Ed Tellwright
Access to Finance Specialist | Business West
15th April 2020

The Coronavirus Business Interruption Loan Scheme (CBILS) has been designed by the UK government and UK banks to allow businesses in the UK to access a variety of debt finance solutions, up to £5m, to support them with lost revenue resulting in cash flow difficulties posed by the current COVID-19 situation.

The scheme provides businesses access to a number of finance solutions including term loans, overdrafts, invoice finance and asset finance solutions. Term loan and asset finance facilities have a potential repayment term of up to 6 years and overdraft and invoice finance facilities 3 years.  

Businesses have struggled to access the finance since its introduction due to the vast number (over 300,000 businesses) of enquiries, with less than 2% currently receiving support. Banks have been reporting a recent improvement in performance, but the system is still new, and the scale of business demand is unprecedented.

The finance industry is not designed to operate at the speed currently required to support all the businesses facing difficulties during this time. With I's to dot and T's to cross, boxes to tick, hoops to jump through and checks to complete, traditional finance providers are struggling to keep pace.  

With concerns initially over eligibility and demands from lenders including personal guarantees, welcome changes were ushered in by the British Business Bank, which relaxed some requirements and expanded availability of the scheme to more businesses.

Further encouragement has been provided over the Easter weekend, as the British Business Bank announced more lenders were being approved to provide the CBILS scheme to support the backlog. Cooperative Bank, Cynergy Bank, Oaknorth Bank, Starling Bank and Coutts and Company are being added to the list of 40+ providers.

The most important thing for any business to do when approaching banks for help with these lending schemes is to prepare before starting the conversation. Banks have processes and questions they want to have answered, so your firm needs to have a grasp of these banking basics before asking for a loan (or you may simply be told to go back and get them). So what do you need to do/have available in order to access this scheme?:  

  • Accounts – filed (up to 3 years if you have them) and management (for the last year)
  • Security – a list of all potential assets 
  • Forecasts – projections for at least the next 12 months, taking into consideration the negative impact of COVID-19 and a potential lack of revenue for the next 3-6 months
  • The amount of funding required – a detailed proposal outlining the amount of funding sought and explanation of why and purpose
  • Timeframe – your timeframe for repaying the finance
  • Business plan – as with all applications for finance, a plan for and of the business will be required. This will obviously need to be tailored or amended to account for the current situation

If you are struggling with a particular lender, don’t forget to shop around. There are many lenders who are participating, and if one bank is struggling to cope or deliver new lending to you, there may be others who are more willing to help. 

However, the bit nobody is saying…

Although the UK Government is trying to support businesses across the country through COVID-19, you must show your proposition is viable. A business considered unsuitable for finance prior to COVID-19 will still be considered unsuitable for CBILS.  

Business West, as part of British Chambers, is currently working with both central government and the banking sector to improve the accessibility of lenders to businesses at this critical time. We are also working hard to improve the scale and delivery of other forms of financial support (government grants, payment holidays, business rate relief, the furloughing of workers), that may be more suitable for firms that don’t want to take on further borrowing.

The latest advice on access to finance can be found on the Trading Through Coronavirus hub pages, so please do register to receive regular updates on this topic and more direct to your inbox.

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