Finding the right funding for your business

Don’t miss out on government-backed Coronavirus business loans

Since March, business owners have had to deal with restrictions on trading, breaks in the supply chain and even wholesale shutdowns, each of which can lead to cash flow problems and a black hole in the balance sheet, especially when bills and wages still need to be paid. 

To help get your business back into shape, there are government-backed loans still available. 

We’ve teamed up with a leading lender to help you get the right funding for your business. Read their guide to understand your funding options and the all-important application deadlines. 

What government support is available for businesses?

Earlier this year, the government put forward a £330 billion package designed to help businesses through the pandemic. The support measures included grants and tax breaks, all of which were either automatically applied or should have been allocated now.

A range of loans were also made available. If your business is in need of financial help, it could be worth considering the following, bearing in mind the application deadlines are fast-approaching:

What is the CBILS loan?

Designed to provide support for SMEs that have seen a dip in revenue and a disruption to cashflow as a result of the COVID-19 outbreak, CBILS provides loans of up to £5 million for UK-based businesses with an annual turnover of up to £45 million.

Finance packages can be arranged for term loans, overdrafts, invoice financing and asset finance, all of which are backed by the government to reduce the risk to lenders. Even though the loans are government-backed, your business will remain fully liable for the debt.

CBILS rules have been relaxed

The rules on the Coronavirus Business Interruption Loan Scheme (CBILS) have been relaxed, which means your business could now be eligible for a loan of up to £250,000 to help ease itself out of lockdown. Even if you’ve previously been turned down, lenders might now be able to offer you a CBILS loan.

Am I eligible for the CBILS loan?

As the rules around CBILS eligibility have been changed, you can now apply (or reapply) for a CBILS loan, so long as your business meets the following conditions:

  • It has fewer than 50 employees and an annual turnover of less than £9,000,000 
  • It’s not subject to collective insolvency procedure under national law
  • It’s not in receipt of rescue aid (which has not been repaid) or restructuring aid (and still subject to a restructuring plan).

What are the benefits of a CBILS loan?

Other features of CBILS loans include: 

  • No repayments, interest or loan fees payable for 12 months
  • Low interest rates from 5.9% to10.2% APR – excluding the interest the government pays the first 12 months (subject to status)
  • No additional fees for settling the loan early

How do I apply for a CBILS loan?

To save your business time and hassle, Think will run a free eligibility check before you apply, which won’t impact your credit score and, if accepted, your application could be processed in just nine days.

Interest-only overdraft facility 

If you’ve struggled with CBILS or been turned down for business funding, there are other financing options available to help your business bounce back after lockdown, including an interest-only overdraft facility, which offers the following:

  • Borrow between £25,000 – £500,000
  • Only pay interest on the money you borrow
  • Pay no interest at all until September 2020
  • Interest charged at 2.00% to 2.25% per month*
  • Lender’s fees apply

You may be asked to provide a debenture as security.*

Coronavirus Large Business Interruption Loan Scheme (CLBILS)

The Coronavirus Large Business Interruption Loan Scheme (CLBILS) is effectively a CBILS loan for large businesses. 

If your business has an annual turnover of more than £45 million and is suffering disruption to cashflow due to lost or deferred revenues during the COVID-19 outbreak, it could be eligible to borrow up to £200 million as a term loan, revolving credit facility (overdraft), invoice finance or asset finance.

How to apply for CBILS or other government-backed loans

**Where security is involved that could risk both business and personal assets Think Business Loans would recommend you seek independent legal advice before agreeing to any terms with lenders