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The Coronavirus Business Interruption Loan Scheme (CBILS) was introduced to support small- and medium-sized businesses severely impacted by the economic effects of COVID-19.

How does the Coronavirus Business Interruption Loan Scheme (CBILS) work?

The UK government hope to use the scheme to give confidence to lenders financing eligible businesses, by acting as a guarantor for 80% of a loan up to £5 million. The scheme is backed by the government’s British Business Bank.

Who is eligible for a Business Interruption loan?

In order to be eligible for the Business Interruption Loan you must;

However, some businesses say they have been turned away for the Coronavirus Business Interruption Loan and pointed towards standard commercial loans instead.

Business secretary, Alok Sharma said it was “completely unacceptable” for banks to turn away struggling businesses during this time. He promised to work with the government to come up with additional measures to help those businesses struggling to access support.

A number of applications for CBILS have already been made and approved, with funds ready to draw down. Despite the CBILS scheme, the loan terms available vary between lenders.

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A summary of CBILS loans available from high street banks

18% of SMEs may not survive past four months

After surveying 13,000 SMEs the Corporate Finance Network found that around 800,000 businesses are concerned they won’t get the cash they need to survive for the next four months.

Similarly, research from productivity organisation Be the Business found that 39% of SMEs have already closed temporarily, and 7% have shut permanently as a result of the crisis. A further 23% are considering redundancies, though the government hope to stem this with the availability of the Coronavirus Job Retention Scheme.

Self-employed workers face the same struggles

The same could be true for the self-employed. Despite the government stepping in to offer 80% of earnings to help self-employed people keep going, there will be a delay in this becoming available. Though the help will be backdated, this does leave many with serious cash flow issues.

For those who are newly self-employed and have not yet submitted a tax return, the Self-Employed Income Support Scheme isn’t open. Instead, anyone in this situation will need to explore applying for Universal Credit or other available options.

Has your business been negatively affected by the crisis? Have you or anyone you know struggled to get financial support or emergency loans? Please share your thoughts below, or join our Facebook group for small businesses

About The Author

Elizabeth Hughes

A content writer specialising in business, finance, software, and beyond. I'm a wordsmith with a penchant for puns and making complex subjects accessible.

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