CBILS is finishing on 31st March and will be replaced by the Recovery Loan Scheme which is due to run until 31st December 2021.
This new scheme continues to help businesses affected by Covid-19 and can be used for any legitimate business purpose, including managing cashflow, investment and growth. The business must however be able to afford to take out additional debt finance for these purposes. So understanding your debt capacity is key.
Features of the scheme will include:
- Up to £10m facility per business: Minimum facility sizes vary, starting at £1,000 for asset and invoice finance, and £25,001 for term loans and overdrafts, up to £10m.
- Turnover limit: No turnover restriction.
- Range of products: Term loans, overdrafts, asset finance and invoice finance facilities will be available.
- Term length: Term loans and asset finance facilities up to six years; overdrafts and invoice finance up to three years.
- Interest and fees to be paid by the business from the outset
- Access to multiple schemes: You will be able to access this scheme even if you have taken out a CBILS, CLBILS or BBLS facility, although the maximum borrowing will depend on the lender’s assessment and scheme requirements.
- Credit checks for all applicants: Lenders will be required to undertake credit and fraud checks for all applicants and these checks may vary between lenders. Lenders may overlook concerns over short-to-medium term performance owing to the pandemic.
As ever, the devil is in the detail and lenders will be heavily scrutinising applications. The support we give clients ensures that the facility is best suited to the business and that the lenders receive the required detail on application.
If you would like any guidance from us, please contact us – speak to any team member directly or call our general number.
T: 01636 577640