As we begin to see the end of this lockdown, you might be considering applying for further financial support in the form of a second CBILS (Coronavirus Business Interruption Loan Scheme) loan.

There are two main conditions you must meet in order to be eligible (as well as the lender criteria).

1. You can only apply for a second CBILS loan if you haven’t already received a loan for the maximum amount (25% of your annual turnover) available to your business.

2. The value of the two CBILS loans combined must not exceed 25% of your annual turnover.

For example, if your current CBILS loan is the equivalent of 20% turnover, you may be able to borrow an additional 5%.

You can however apply for multiple CBILS loans if you own various companies, the 25% is based on per company turnover.

How to apply for a second CBILS loan?

The best way to apply for a first or second CBILS loan is through your accountant. It’s an easy process, we have access to over 120 different funders and can approach them on your behalf.  All we need to know from you is how much you’d like to borrow, what it is for  and how quickly you need the funds.

If your business has already received the maximum amount through a CBILS facility or aren’t eligible for one of the government’s loan schemes, we can still look at other business funding options.

Can you apply for a BBLS (Bounce Back Loan Scheme) loan as well as a CBILS loan?

According to the British Business Bank, you are not allowed to take out a Bounce Back Loan if you have already received a CBILS facility, and vice versa.

However, a business that has a CBILS facility can apply for a Bounce Back Loan if the Bounce Back Loan facility will refinance the CBILS facility in full, ie, less than £50,000.

What is the criteria for a CBILS loan?

You have to meet various eligibility requirements to be eligible for a CBILS loan. These include (but are not limited to) the following:

  • Business must be based in the UK

  • Annual turnover less than £45 million

  • A borrowing proposal which the lender would consider viable, were it not for the pandemic

  • Self-certification that the business had been negatively impacted by COVID-19

  • Not classed as a “business in difficulty” if borrowing more than £30,000

As with any loan for a business, you will be required to provide documentation when you apply. Our corporate finance team will talk you through exactly what you need, but it may help to speed things along if you have the following to hand in advance:

  • Management accounts

  • Business plan

  • Historic accounts

  • Details of any assets

CBILS loans are unique in that the government guarantees 80% of the finance to the lender and pays the interest for the first 12 months and any arrangement fees.

As the borrower, you remain 100% liable for the debt. For loans under £250,000, you won’t be expected to provide a personal guarantee.

For facilities over £250,000 you may be required to provide a personal guarantee, however recoveries are capped at 20% of the outstanding balance of the loan once the proceeds of business assets have been applied, and a Principal Private Residence (PPR) cannot be used as security.

Speak to an expert

Whether you’re ready to apply for your first CBILS loan, are eligible to take out a second or are seeking an alternative finance option, our experts can help.  Book a FREE appointment with our Corporate Finance team here.