A closer look at CBILS and how the scheme can help SMEs

Growth Lending is now an accredited provider of the government’s Coronavirus Business Interruption Loan Scheme (CBILS), which was introduced to support firms whose cash flow has been disrupted by the Covid-19 pandemic. The scheme closes for applications on 31 March 2021.

Comprising three lenders (BOOST&Co, GapCap and KX Media Capital), the Growth Lending Group has a wealth of expertise in the three products it is offering under CBILS – revolving credit facilities, invoice discounting and term loans.

We can provide funding from £100,000 to £5m to UK SMEs. The government guarantees 80% of each loan and covers interest and fees for the first 12 months. To apply, click here.

We’ve noticed some uncertainty in the market around the eligibility criteria, so here, we present a guide to CBILS for our existing and new customers, all of whom are eligible for the scheme.

1. What is CBILS and why was it introduced?

CBILS was launched in late March by the government to support viable British businesses that have been adversely affected by Covid-19. It offers funding to help these companies survive the crisis, through lenders that have been accredited by the British Business Bank.

Facilities can be up to £5m, and one key benefit of the state-backed scheme is that the government guarantees 80% of each loan, also paying interest and fees for the first 12 months.

2. What can I use a CBILS facility for?

Funding may be used for working capital, for investment (including mergers and acquisitions) or for refinancing or consolidating existing debt.

As our name suggests, Growth Lending focuses strongly on growth. We can support qualifying firms that aim to use CBILS funds to maintain existing growth strategies or to implement new projects made possible in the current climate, such as expanding or buying an existing UK business.

3. Am I eligible for CBILS?

The main eligibility criteria are as follows: 1) you have a limited company or a partnership registered in the UK; 2) your company was not considered a “business in difficulty” as of 31 December 2019, as per the British Business Bank’s definition; 3) your business has been adversely affected by Covid-19; 4) your business’s turnover was less than £45m in 2019 and you have fewer than 250 full-time employees; and 5) your business generates more than 50% of turnover from normal trading activities.

Companies in all sectors are eligible, with the exception of banks, insurers and reinsurers (but not insurance brokers), public-sector bodies and state-funded primary and secondary schools. Additionally, Growth Lending is not supporting firms in the construction sector.

4. Can I apply to Growth Lending?

We have a preference for innovative and high-tech businesses, but we welcome applications from any firms with a growth trajectory before March 2020, a maximum turnover of £45m (minimum run-rate £1.5m), a demonstrable 18-month cash runway and good revenue visibility in normal market conditions.

We specialise in working with companies that fall outside banks’ lending criteria, and we do not automatically reject loss-making businesses. If a company is loss-making, we will analyse the strength of its balance sheet.

5. What CBILS products does Growth Lending offer?

The three CBILS facilities available from Growth Lending are:

Revolving credit facilities

A flexible line of credit that unlocks funds tied up in your balance sheet and strengthens working capital

Funding amount: £100,000-£5m

Contract length: 2-3 years

Interest rate: 8%-14% p.a.

Security: first-ranking debenture, no personal guarantees

Invoice discounting

A facility against your sales ledger that boosts your cash flow position

Funding amount: £100,000-£5m

Contract length: 2-3 years

Interest rate: 8%-14% p.a.

Security: first-ranking debenture, no personal guarantees

Term Loans

Designed to provide an extended funding runway and capital to achieve next-level growth

Funding amount: £750,000-£5m

Contract length: 3-5 years

Interest rate: 8%-14% p.a.

Security: first-ranking debenture, no personal guarantees

6. How do I apply for a CBILS facility?

First, read our blog on how to prepare, which provides an eligibility checklist and explains the supporting documentation you will need.

Next, have a look at our six-step guide on how to apply. This outlines the process you will follow if you are successful, from filling in our application form to receiving the funds.

If you already know that you want to apply, our online form takes no longer than ten minutes to complete. You are able to sync your accounting software or manually upload the required documents.

When you’ve chosen your preferred CBILS facility, click to get started:

• Revolving credit facilities application form

• Invoice discounting application form

• Term loan application form

7. What happens after I’ve applied?

Within 24 hours, our internal pre-vetting team will get in touch to confirm whether you are eligible to move to due diligence. If so, we will begin this process, during which we may request further documents and answers to queries.

Upon approval of underwriting, we will release the commercial terms to be discussed and signed, after which we will release funds to your account.

8. How quickly can I receive CBILS funding?

Growth Lending will look to turn things around in less than two weeks, but due to the nature of the larger facilities, it is likely to take closer to four weeks for term loan applications.

9. I have more questions – can I speak to someone?

Of course! Our top ten FAQs may answer your questions, but please feel free to contact us on +44 (0)20 3740 9710 or cbils@growth-lending.com.

Give us a little detail about your company, your preferred CBILS facility and your queries: we’ll then match you with the most appropriate expert, who will get in touch soon.

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