Originally introduced at the start of the pandemic, CBILS (Coronavirus Business Interruption Loan Scheme) and BBLS (Bounce Back Loan Scheme) are part of a wider package of Government-backed loan schemes to help businesses overcome challenges due to the Covid-19 outbreak.
CBILS provides financial support to SMEs across the UK that may have suffered from lost revenue, disrupted cash flow or any other adverse effects due to the pandemic; while BBLS was designed to enable small businesses to access finance more quickly to aid cash demand for their business operation.
Current deadline
Due to ongoing effects of the pandemic, the deadline for obtaining support through CBILS and BBLS has been extended until 31 March 2021.
“With the deadline for both CBILS and BBLS fast approaching, any business who can see a need for additional cash within the next 12 months should apply now. Many people do not realise that these loans can be used for capital expenditure, the refinancing of existing facilities or can even fund the expansion plans of a business. They are not merely there to provide additional working capital”, says Matt Beckley, Corporate Finance Partner at DTE.
What can CBILS and BBLS money be used for?
As Government-backed loan schemes, both CBILS and BBLS should be used to fund specific activities that help businesses overcome the challenges of the Covid-19 pandemic. Whilst there are specific nuances within each scheme, broadly the funds can be used for:
Support working capital Investment into the business and its operations, such as capital expenditure Growth capital Refinancing of existing facilitiesAll of the above are subject to funders specific lending and eligibility criteria. DTE Corporate Finance have worked alongside a range of funders nationally and can assist in identifying an appropriate funding partner where appropriate.
Other key features of CBILS and BBLS
CBILS:
Loan value of up to £5 million Repayment terms of up to 6 years (currently) Interest-free for 12 months, with no additional lender charges No guarantee fee for borrowers No personal guarantees for facilities under a level specified on a funder by funder basisBBLS:
Loan values ranging from £2,000, up to 25% of a business’ turnover with a maximum of £50,000 Repayment terms of up to 10 years, with no repayments required for the first 12 months Early payment allowed with no fees No fee to access this scheme for borrowers Interest rate for the loan is set at 2.5% per annum(Read more about the key aspects of a successful applicant.)
Calls for extension of repayment terms for CBILS
Recently, there have been calls from industry commentators that CBILS should be paused and repayment terms should be extended from 6 years to 10 years, so that terms for CBILS borrowers are in line with those for BBLS borrowers, alleviating pressure from businesses and allowing them more time to recover from the pandemic before having to repay the loans.
At the moment, it is not yet clear if either CBILS or BBLS will be extended further than March, or if there will be an extension for CBILS repayment terms; however, since the current application deadline for both loan schemes are approaching, it is advised that businesses looking to apply for either scheme should prepare their application sooner for a higher chance of approval.
If you have any questions about CBILS or BBLS, or would like to discuss your specific situation, get in touch with DTE Corporate Finance today and one of our advisers will get back to you as soon as possible.
This article was originally published on DTE website at https://www.dtegroup.com/news/covid-19-business-support-hub/cbils-and-bbls-current-deadline-and-other-key-points-you-should-know-about/