Coronavirus Business Interruption Loan Scheme

The Coronavirus Business Interruption Loan Scheme (CBILS) closed for new applications on 31 March 2021. If you started your application before then, we’ll be in touch shortly – there’s no need to call us.

Visit our coronavirus support page for other products and services, including government schemes that you might be able to apply for.

Is the CBIL Scheme a loan or a grant?

CBILS is not a grant. It provides a guarantee to us so that we can provide finance, but businesses still have to repay the loan in full. The borrower is responsible for repayment of 100% of the debt and not just the 20% outside the coverage of the government's guarantee.

As the borrower is liable in full for the debt, we may request additional security.

• Security may be required, subject to application
• We will not take personal guarantees as security for any CBILS loans 
• The borrower’s primary residential property cannot be taken as security under the scheme.

The government has also announced a number of other support measures that businesses may be eligible for. You can find more information on these measures are available on Gov.uk.

Do I need to give security for a CBILS loan?

Security may have been required, subject to application. We didn’t take personal guarantees as security for any CBILS loans. The borrower’s primary residential property couldn’t be taken as security under the scheme.

Details of this will have been agreed with you at the start of your loan.

What kind of interest rates will businesses need to pay?  

If your business is eligible for a ‘Business Interruption Payment’, then the UK Government will cover the first 12 months interest applicable to your loan together with certain fees, including the arrangement fee. The ‘Business Interruption Payment’ is provided by the UK Government to support eligible customers to help businesses manage in these challenging circumstances. After the initial 12 months, the interest rate on your loan that has been agreed and communicated to you at the outset will start to apply.

The CBILS isn’t available to businesses borrowing £50,001 or more if the business was an ‘Undertaking in Difficulty’ as of 31 December 2019. ’Undertaking in difficulty’ is defined in Article 2 (18) of the Commission Regulation (EU) no. 651/2014 of 17 June 2014. When you apply, we’ll ask you to confirm that your business wasn’t an undertaking in difficulty as of 31 December 2019.

(a) In the case of a limited liability company (other than an SME that has been in existence for less than three years or, for the purposes of eligibility for risk finance aid, an SME within 7 years from its first commercial sale that qualifies for risk finance investments following due diligence by the selected financial intermediary), where more than half of its subscribed share capital has disappeared as a result of accumulated losses.

This is the case when deduction of accumulated losses from reserves (and all other elements generally considered as part of the own funds of the company) leads to a negative cumulative amount that exceeds half of the subscribed share capital. For the purposes of this provision, ‘limited liability company’ refers in particular to the types of company mentioned in Annex I of Directive 2013/34/EU ( 1 ) and ‘share capital’ includes, where relevant, any share premium. 

(b) In the case of a company where at least some members have unlimited liability for the debt of the company (other than an SME that has been in existence for less than three years or, for the purposes of eligibility for risk finance aid, an SME within 7 years from its first commercial sale that qualifies for risk finance investments following due diligence by the selected financial intermediary), where more than half of its capital as shown in the company accounts has disappeared as a result of accumulated losses.

For the purposes of this provision, ‘a company where at least some members have unlimited liability for the debt of the company’ refers in particular to the types of company mentioned in Annex II of Directive 2013/34/EU. 

(c) Where the undertaking is subject to collective insolvency proceedings or fulfils the criteria under its domestic law for being placed in collective insolvency proceedings at the request of its creditors. 

(d) Where the undertaking has received rescue aid and has not yet reimbursed the loan or terminated the guarantee, or has received restructuring aid and is still subject to a restructuring plan. 

(e) In the case of an undertaking that is not an SME, where, for the past two years: 

(1) the undertaking's book debt to equity ratio has been greater than 7,5 and 

(2) the undertaking's EBITDA interest coverage ratio has been below 1,0.

For smaller businesses

Following EU changes in State Aid Law relating to the ‘Undertaking in Difficulty’ test for businesses, the British Business Bank has amended its Coronavirus Business Interruption Loan Scheme.

These changes mean that smaller businesses with fewer than 50 employees and less than £9,000,000 in annual turnover and/or annual balance sheet will not be considered undertakings in difficulty unless they are (a) subject to collective insolvency procedure under national law, or (b) in receipt of rescue aid (which has not been repaid) or restructuring aid (and are still subject to a restructuring plan).

Smaller businesses with more than 50 employees or more than £9,000,000 in annual turnover and/or annual balance sheet will still be subject to the ‘Undertaking in Difficulty’ test as defined by the European Union.

These changes will apply from 30 July 2020.

Following EU changes in State Aid Law relating to the ‘Undertaking in Difficulty’ test for businesses, the British Business Bank has amended its Coronavirus Business Interruption Loan Scheme.

These changes mean that smaller businesses with fewer than 50 employees and less than £9,000,000 in annual turnover and/or annual balance sheet will not be considered undertakings in difficulty unless they are (a) subject to collective insolvency procedure under national law, or (b) in receipt of rescue aid (which has not been repaid) or restructuring aid (and are still subject to a restructuring plan).

Smaller businesses with more than 50 employees or more than £9,000,000 in annual turnover and/or annual balance sheet will still be subject to the ‘Undertaking in Difficulty’ test as defined by the European Union.

These changes will apply from 30 July 2020 and mean lenders may now be able to offer CBILs to businesses which had previously been unable to access them. If your business has been affected by coronavirus and you believe it’s eligible for a CBIL, please get in touch with your usual point of contact or start your application online. Our Business Banking colleagues will be happy to help you.

If you apply for a CBIL, you’ll need to have a credit assessment. CBILs are available to medium-sized businesses with a turnover of up to £45 million, who have a viable business proposition.

For more information, take a look at the British Business Bank’s website.

Your loan repayment is made up of two parts: your capital repayment and your interest payment.

• Your capital repayments pay off the amount of the loan that you have borrowed, and they’ll be the same each month
• Your loan also incurs interest, so each month you’ll be charged interest on the remaining capital balance – that’s the amount of money you still owe
• Because of this, the amount of interest you pay each month will go down, as you repay your loan
• This means your first monthly repayment will be the highest, and the total monthly repayment amount (made up of both your loan and the interest) will be different every month

Your loan agreement sets out how much your capital repayment amount will be each month, but it doesn’t include your interest. We understand this can be confusing, so you’ll also get a letter telling you exactly what your next total repayment amount is every month – we’ll send it around 15 days before your repayment is due.