Coronavirus Business Interruption Loan Scheme

How to apply for the Coronavirus Business Interruption Loan Scheme

Given the current COVID-19 pandemic, many UK businesses will be struggling to repay debts. This puts these companies under high risk of being wound-up should a creditor serve a winding-up petition. The Insolvency Rules are still in place during this time, therefore a director of debtor company should not rely on this. Instead, the government have offered loans to support small and medium-sized businesses, which may mean the difference between a company being declared insolvent and continuing trading.

The Coronavirus Business Interruption Loan Scheme (CBILS) supports small and medium-sized businesses, with an annual turnover of up to £45 million, to access loans, overdrafts, invoice finance and asset finance of up to £5 million for up to 6 years.

Who is the Coronavirus Business Interruption Loan Scheme for?

The Government’s loan scheme permits small and medium-sized businesses affected by coronavirus (COVID-19) to access finance of up to £5 million.

Is my business eligible for the Coronavirus Business Interruption Loan Scheme (CBILS)?

Your business is eligible if it:

  • is based in the UK
  • has an annual turnover of up to £45 million
  • has a borrowing proposal which the lender would consider viable, if not for the coronavirus pandemic

Which businesses are not eligible for the CBILS?

The following businesses are not eligible to apply:

  • banks, insurers and reinsurers (but not insurance brokers)
  • public-sector bodies
  • further-education establishments, if they are grant-funded
  • state-funded primary and secondary schools

What are Business Interruption Payments?

The government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees. This means smaller businesses will benefit from no upfront costs and lower initial repayments.

How much does the government guarantee to lenders to businesses affected by coronavirus?

The government will provide lenders with a guarantee of 80% on each loan (subject to pre-lender cap on claims) to give lenders further confidence in continuing to provide finance to small and medium-sized businesses.

Who delivers the coronavirus loans?

The scheme is delivered through commercial lenders, backed by the government-owned British Business Bank. Click here for the 40 accredited lenders able to offer the scheme (which includes all the major banks).

What information do I need to provide to a lender to get the coronavirus loan?

Details of the Loan

  • The amount you would like to borrow;
  • What the money is for — the lender will check that it’s a suitable business purpose and the right type of finance for your needs; and
  • The period over which you will make the repayments — the lender will assess whether the loan is affordable for you.

Supporting Documents

You will need to provide certain evidence to show that you can afford to repay the loan. This is likely to include:

  • Management accounts;
  • Cash flow forecast;
  • Business plan;
  • Historic accounts; and
  • Details of assets.

I have received a Winding Up Petition

If your company has received a winding up petition it is essential you seek legal advice as soon as possible. HMRC and other creditors know you are taking matters seriously when you instruct a specialist law firm to assist you by negotiating with creditors and advising and representing you in and at Court. 

We can be instructed to defend the petition or seek an adjournment at the hearing. We offer a fixed cost service to prepare and appear on your company’s behalf to seek an adjournment at the High Court (Companies Court). To instruct specialist winding up petition solicitors to oppose the Petition, contact us now. To contact one of our Solicitors or Barristers please click here or call 0207 183 0529.

Please note: If you have been served a winding-up petition do not delay in contacting us as your matter can be handled more effectively the sooner you contact us.

Instruct Specialist Winding Up Petition Solicitors

We are a specialist City of London law firm made up of Solicitors & Barristers and based in the Middle Temple Inns of Court adjacent to the Royal Courts of Justice.  We are experts in dealing with matters surrounding insolvency in particular issues.  Our team have unparalleled experience at serving statutory demands, negotiating with debtors/creditors, setting aside statutory demands and both issuing and defending winding up petitions vigorously at the Royal Courts of Justice (Rolls Building), or the relevant High Court District Registry or County Court with jurisdiction under the Insolvency Rules.

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