There are several reasons why you might get offered a business loan outside of CBILS:

1. 1. 1. Not every business finance provider in the UK is accredited. You can check the British Business Bank website for the latest list of acredited lenders or apply on FSB Funding Platform and we can signpost you to those that we work with.
      2. Not every accredited lender can provide every type of finance that CBILS covers: the lender may have – based on your application – concluded that a non-CBILS product is a better match for your funding needs.
      3. CBILS launched with a caveat, whereby lenders were encouraged to offer loans on commercial terms where Government backing was not required. Access to the scheme has now been opened up further and you may therefore consider re-contacting your lender if you have previously been unsuccessful in securing funding.

Your business does not automatically qualify for funding. The eligibility criteria will vary for each lender, and as such each lender has the authority to decide whether to offer finance to your business or not.

A good way to think about this, is that the Government provides backing at a ‘wholesale’ level to accredited lenders. And then each lender turns CBILS into ‘market-facing’ products. In practice this means that some lenders will offer one type of product, and larger providers may offer several business finance options. To learn more about lenders’ requirements, see the British Business Bank Quick Eligibility Checklist.

As of 3 April 2020, the following product types are in scope:

• • • Term Loans
    • Asset Finance
    • Invoice Finance
    • Revolving Credit (Overdrafts)

At launch of the scheme, there has been some confusion about the security businesses need to provide to qualify for a CBILS loan.

The Government has clarified on 3 April 2020, that lenders are banned from requesting personal guarantees on loans under £250,000.

For facilities above £250,000, personal guarantees may still be required, but:

• • • they exclude the Principal Private Residence (PPR), and
    • recoveries are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied

If you have been offered finance and are unsure about the terms, you can request a callback from the team at FSB Funding Platform. We are always happy to try and help you review your options.

Yes, as with all business finance arrangements, your business will be charged interest by the lender. The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied charges.

However, since each lender needs to turn the Government’s guarantee scheme into ‘market-facing’ finance products, there is no ‘standard’ interest rate.

Please also remember, any business borrowing funds under CBILS remains fully liable for the debt. As such, the usual considerations in terms of affordability, etc. do still apply, e.g.:

• • • If you decide to take on a term loan or asset finance facility, you may be repaying  the funding and interest for up to six years.
    • Overdrafts and invoice finance facilities in the CBILS can run for up to three years.

Because the Coronavirus pandemic affects businesses in different ways, you will find that CBILS applications require more detail than a standard business finance application.

We have updated FSB Funding Platform to help you save you time when applying online, but expect to answer the following questions from lenders:

Funding requirements

• • • The amount you are seeking
    • What the funding will be used for — the lender is obliged to check that their finance product suits your business needs
    • Your preferred repayment period — this is important, because lenders need to assess whether your business can afford the loan

Supporting documents

• • • Management accounts
    • Cash flow forecast
    • Business plan
    • Historic accounts
    • Details of assets

The above list will vary for each lender, but what is a common theme is that you will need to provide evidence to show that your business can afford to repay the amount you are borrowing plus interest. Users of FSB Funding Platform have the use of Open Banking and accounting software integrations to help prepare their finance application in minutes.