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Coronavirus Business Interruption Loan Scheme

The Coronavirus Business Interruption Loan Scheme (CBILS) provides financial support to smaller businesses (SMEs) across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak.

Bounce Back Loan Scheme

The Bounce Back Loan Scheme (BBLS) provides financial support to businesses across the UK that are losing revenue, and seeing their cashflow disrupted, as a result of the COVID-19 outbreak and that can benefit from £50,000 or less in finance.

Loan comparison

Coronavirus Loans (CBILS)Bounce Back Loan Scheme (BBLS)
GuaranteeProvides the lender with a government-backed, partial guarantee (80%) against the outstanding guarantee facility balance (only principal). The portfolio cap has now been removed.

Guarantee amount: 80%
For: Principle Only
Portfolio Cap: None
 
Provides the lender with a government-backed, full guarantee (100%) against the outstanding guarantee facility balance (both principal and interest), with no portfolio cap.

Guarantee amount: 100%
For: Principle and Interest
Portfolio Cap: None
Guarantee fee for businessesNo feeNo fee
Fee charged to lenders for each facilityA fee is charged to lenders for each facility which makes use of the SchemeNo fee to lenders
Types of facilityTerm loans
Overdrafts
Invoice finance
Asset finance facilities
Term loans
Maximum and minimum value of facilityFor term loans and overdrafts
Minimum value: £50,001
Maximum value: £5m

Lenders delivering asset or invoice finance facilities only will still be able to provide finance at less than £50,001.
Minimum: £2,000
Maximum: is 25% of turnover up to a cap of £50,000

The minimum value of a facility provided under the Scheme is £2,000; the maximum is 25% of turnover up to a cap of £50,000.
Interest rate and fees set by lenderInterest and fees are set by accredited lenders and will vary by lenderThe interest is set by government at 2.5% per annum. No lender-levied fees.
Repayment termsRepayment terms limited to a maximum of six years for term loan and asset finance facilities up to £5m.

For overdrafts and invoice finance facilities, terms are up to three years.

The government will make a Business Interruption Payment to the lender to cover first 12 months of interest and fees payable.

Principal repayment holidays are at the discretion of the lender.
Repayment terms are six years, but there are no additional fees for early repayment charges.

The government will make a Business Interruption Payment to the lender to cover first 12 months of interest payable.

The borrower has a 12-month principal repayment holiday.
RefinancingRe-financing limited to a maximum of 20% of a lenders’ total CBILS lending.There is no restriction on the total amount of the facility that may consist of refinancing.
Assessment of affordability and viabilityBusinesses must:

Have a borrowing proposal which the lender would consider viable, were it not for the current pandemic

Self-certify that it has been adversely impacted by the coronavirus (COVID-19)

Not have been classed as a ”business in difficulty” on 31 December 2019, if applying to borrow £30,000 or more.

All lending decisions remain fully delegated to lenders.
The borrower is required to self-declare they meet the eligibility criteria for the scheme.

Lenders do not have to assess a business’ affordability or viability. Lenders are not responsible for the borrower’s decision to borrow.
Borrower’s protectionAll existing statutory rights (for example, Consumer Credit Act and FCA protections) apply.Not subject to many of the usual consumer protections that apply to business lending under £25,000. Borrowers do not have the benefit of protection and remedies that would otherwise be available under the Consumer Credit Act 1974.
Businesses eligibleAvailable to UK-based businesses with annual turnover of up to £45m per year.

Smaller businesses from all sectors can apply for the full amount of the facility. However, fishery, aquaculture and agriculture businesses may not qualify for the full interest and fee payment.
Available to most UK-based businesses, regardless of turnover.

If the business is a “business in difficulty” as of December 31 2019 then businesses in agriculture, aquaculture or fisheries may not qualify for the full amount; and the loan cannot be used for export-related activities.
Personal guaranteesNo personal guarantees for any facilities below £250,000. Other forms of security may still be required by the lender.
Security, including personal guarantees may still be required for facilities above £250,000 but they exclude a borrower’s main home; and recoveries are capped at a maximum of 20% of outstanding balance.
No personal guarantees.
No recovery action can be taken over a borrower’s main home or primary personal vehicle.
For sole traders or partnerships, who do not have the benefit of limited liability, other personal assets may be at risk of recovery action.