Beyond the balance sheet

How to access the Coronavirus Business Interruption Loan Scheme

Amy Cotton 29/5/2020 5 minute read

Amy Cotton of Capitalise explains the application process and requirements of the Coronavirus Business Interruption Loan Scheme.

Amidst all the tough headlines of late, there is some good news for SMEs!

We now have more clarity as to how the Coronavirus Business Interruption Loan Scheme works and what's required to access it. Consequently, we are starting to see businesses getting approvals for this funding through our Capitalise platform.

Just as well given a recent British Chamber of Commerce survey revealed 62% of businesses had no more than three months of cash left to cover running costs! If you haven't used our service before, Capitalise is an online business funding platform that assists SMEs in discovering potential finance partners who can help boost your cashflow and shore up your balance sheet.

How to best prepare for the CBILS application process? Get professional advice  >

Given the service we provide, we're at the epicentre of the government's vital new loan scheme to support businesses. Having seen successful applications, we've put this guest post together to help you understand the application process and the requirements of its lenders. 

The funding was made available from Monday 23 March 2020. In guaranteeing most of the value of the loans, the government are reducing the risks of exposure to potential defaults for banks, thereby in theory making them more willing to lend.

The documentation you'll need to provide in a CBILS loan application

  • The last 3 years of full accounts with detailed Profit & Loss
  • The last 12 months business bank statements (Lloyds Bank usually require 6 months personal statements as well)
  • Up to date management accounts
  • Aged debtor and creditor lists
  • Confirmation of any outstanding debt (provider, term, repayment)
  • Statements of personal assets, liabilities, income and expenditure from all directors
  • The home addresses of all directors/shareholders
  • A paragraph on how Covid-19 has affected the business and what the funds will specifically be used for
  • Cashflow forecasts for the next 12 months

What lenders are asking for in CBILS applications

Lenders are asking for a lot of information. Where SMEs are providing them with what's required, we're seeing applications processed in a decent time frame. For all CBILS applications to Natwest, Barclays, Lloyds and Santander, you will need to answer the following questions in the 'Background & Funding Purpose' box on the client profile in Capitalise in order to proceed.

Be sure to check the below carefully in preparation for your application:

1. What is the purpose of requesting finance?

Is it for short term cash flow requirements such as paying suppliers or is this a longer term cash injection?

How will you use the finance to address the shortfall in funds caused due to COVID-19?

2. How much are you looking to borrow?

How much are you requesting and why?

You'll need to explain how you have calculated the amount. You'll also need to detail which areas of your business have been impacted by COVID 19 and how the finance will be used to help the business through the disruption. Be sure to consider how the borrowing will support the longevity of the business?

3. On what basis has the amount to borrow been calculated?

Has this been based on existing (pre-virus) income and expenditure levels or likely future projections? If projected, what assumptions are you using? Will you likely require further borrowing at a later date?

4. When the Pandemic is over, how long will it take your business to recover?

What challenges do you expect to see? Consider the likely loss of contracts and restrictions on staff availability.

What changes are you making in the short and longer term to help drive business performance back to pre virus levels and beyond?

5. Sales

What was your annual turnover in 2019?

6. Wages

What was your annual wage bill in 2019?

7. Employees

What is your current number of employees on the payroll?

8. Operating expenses

What are the costs you currently have to pay in regards to running the business e.g. staffing costs, business premises costs, stock and or/other debt costs and what are you doing to reduce them? 

9. Other sources of finance

You will need to provide a list of any other loans and financial commitments that are outstanding? You'll need to include the monthly payments you have to make for each source of finance.

10. What COVID-19 Government support have you made use of?

What have you been able to access in terms of government schemes in response to Covid-19? This includes support such as:

The Coronavirus Business Interruption Loan Scheme

The content of this post was created on 06/04/2020 and updated on 29/05/2020.

Please be aware that information provided by this blog is subject to regular legal and regulatory change. We recommend that you do not take any information held within our website or guides (eBooks) as a definitive guide to the law on the relevant matter being discussed. We suggest your course of action should be to seek legal or professional advice where necessary rather than relying on the content supplied by the author(s) of this blog.



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