ABOUT THE 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.
The scheme is a part of a wider package of government support for UK businesses and employees. Read more at the Government's Business Support website.
HOW IT WORKS
British Business Bank operates CBILS via its accredited lenders. There are over 40 of these lenders currently working to provide finance. They include:
A lender can provide up to £5 million in the form of:
CBILS gives the lender a government-backed guarantee for the loan repayments to encourage more lending. The borrower remains fully liable for the debt. The Big Four banks have agreed that they will not take personal guarantees as security for lending below £250,000.
The maximum value of a facility provided under the scheme is £5 million, available on repayment terms of up to six years.
The scheme provides the lender with a government-backed, partial guarantee against the outstanding balance of the finance.
The borrower remains 100% liable for the debt.
The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied charges.
For term loans and asset finance facilities: up to six years.
For overdrafts and invoice finance facilities: up to three years.
If a lender can offer finance on normal commercial terms without making use of the scheme, it will do so.
The lender can choose to use the scheme for unsecured lending for facilities of £250,000 and under.
For facilities above £250,000, it must establish that the borrower is unable to provide security, before it uses CBILS.
There are no guarantee fees for SMEs. Lenders pay a fee to access the scheme.
When a company announces a distressed situation; this is in most cases, the result of an extensive impact involving important economic, legal, tax and accounting decisions; bankruptcy, excessive debt and regulatory constraints. A restructuring exercise can turn into a fairly high-profile event, and it is crucial to the future of the company that the end-to-end process is managed with great sensitivity, confidentiality and efficiency.
Adan's experience:
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We frequently draw upon the expertise of our restructuring and insolvency colleagues and their experience of advising on investing in companies in distressed situations, purchasing assets and businesses out of companies in distressed situations and restructuring companies near and in insolvency. We provide expert support throughout the entire lifecycle, delivered by local and global teams. This enables us to help banks create liquidity and unlock capital for reinvestment in other value adding lending activity benefitting the firm more broadly.
Our broad client base includes debtors, secured and unsecured creditors (including financial institutions, mezzanine investors, insurance companies, bondholders and landlords), creditor committees, special opportunity/situation investors, directors/officers and insolvency practitioners. Through working with these clients our team of professionals have gained valuable insights into the approaches of key stakeholders across the capital structure, and have developed and delivered innovative and practical solutions such as:
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