FAQs for SMEs: Coronavirus Business Interruption Loan Scheme (CBILS)

Launched in response to the coronavirus outbreak, the Coronavirus Business Interruption Loan Scheme (CBILS) is designed to support UK businesses during this period of disruption.

We’ve compiled responses to some of the most frequently asked questions from SMEs about CBILS.

Scheme Features

What is the Coronavirus Business Interruption Loan Scheme (CBILS)?

What are the key features of CBILS?

How do I know if I am eligible to apply?

How do I apply?

What supporting documents might I need to apply?

When can I access the scheme?

What types of finance are available and who offers which type?

What fees and interest will I be required to pay?

Do I need to provide evidence that I have a viable business?

Will I need security to get a CBILS-backed loan?

What do the rules around personal guarantees mean?

Is a CBILS facility available to existing customers of participating lenders or can an SME that is not an existing customer still apply?

Can CBILS be used to refinance an existing commercial facility?

What types of businesses is CBILS for?

What is the definition of an SME for CBILS?

One of the eligibility criteria is for the business to have an annual turnover of no more than £45 million. Would the £45 million turnover threshold be measured on the entirety of the Group or could the funding be taken by a single operating subsidiary? Can the different companies within the group access their “own” guarantee?

What if my business has turnover of more than £45m and I would not be eligible for CBILS?

What is “turnover” for the purpose of checking eligibility for CBILS?

What is a “sole enterprise”?

What is a “linked” business?

What is a “partner” business?

Are sole traders/freelancers eligible?

Does CBILS require that all eligible companies generate a certain percentage of annual turnover from trading activities?

Is the scheme appropriate for start-ups?

Can companies that have received support from the Enterprise Investment Scheme (EIS) apply for CBILS?

Are further education establishments (including sixth form colleges and vocational training establishments) eligible?

Are charities eligible?

Are housing associations eligible for CBILS?

Are financial services firms eligible for CBILS?

Are membership organisations eligible for CBILS?

Are public-sector organisations eligible for CBILS?

Are exporters eligible?

If a company with UK employees exports over 80% of its services, does this class as a UK business activity?

Is an SME based overseas eligible?

Is a company that derives income from property eligible for CBILS?

Are businesses with private equity investment eligible under the CBIL Scheme, subject to them meeting the CBILS eligibility criteria?

I have had de minimis aid in the past. Can I still get a loan?

I am getting other kinds of aid to help respond to the coronavirus. Can I still get a loan?

Which businesses meet the “business in difficulty”/ “undertaking in difficulty” criteria?

What does the accumulated losses criteria for an “undertaking in difficulty” mean?

What are “collective insolvency proceedings”?

What does “fulfils the criteria under its domestic law” mean in collective insolvency proceedings?

What defines rescue aid or restructuring aid?

Which companies can be classed as SMEs for the “undertaking in difficulty” definition?

When is a company that is not an SME (because it has 250 or more employees) considered to be “in difficulty”?

Should the tests for a “undertaking in difficulty” be on an individual or group basis?

Are there any exceptions to the accumulated losses test?

Are there any exceptions to a business having to be a “undertaking in difficulty”?

How does the “undertaking in difficulty” test apply to a charity or non-profit organisation?

What’s happening to the old Enterprise Finance Guarantee (EFG) Scheme?

How is CBILS different from the EFG Scheme?

Are there any restrictions on a borrower refinancing their EFG facility to a CBILS facility?

I have an existing EFG facility with my lender that I need to discuss. What do I do?

Scheme Features

What is the Coronavirus Business Interruption Loan Scheme (CBILS)?
CBILS provides facilities of up to £5 million for smaller businesses across the UK that are impacted by Covid-19. CBILS supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance facilities.

Note: This scheme is just one of a number of measures announced by Government. You can find full details of measures to support public services people and businesses through this period of disruption caused by coronavirus.

What are the key features of CBILS?
CBILS guarantees facilities up to a maximum of £5 million, available on repayment terms up to six years (for term loans and asset finance) and up to three years (for overdrafts and invoice finance facilities).

The scheme provides the lender with a government-backed guarantee against the outstanding balance of the facility. The business remains 100% liable for repayment of the facility.

There is no guarantee fee for SMEs to access the scheme. The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees[1]. You (the SME) will therefore benefit from no upfront costs and lower initial repayments[2].

Under the scheme, lenders will not take personal guarantees of any form for facilities below £250,000.

For facilities above £250,000, personal guarantees may still be required, at a lender’s discretion, but:

  • they exclude the Principal Private Residence (PPR); and
  • recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied

For all facilities, including those over £250,000, CBILS supports lending to smaller businesses even where a lender considers there to be sufficient security. Where there is sufficient security available, it is likely that the lender will take such security in support of a CBILS facility. A borrower’s/guarantor’s Principal Private Residence (PPR) cannot be taken as security to support a personal guarantee or as security for a CBILS-backed facility (but a lender may wish to do so to support a commercial facility alongside the CBILS-backed facility).

How do I know if I am eligible to apply?
Smaller businesses (SMEs) from all sectors[3] can apply for the full amount of the facility, up to a maximum of £5 million. To be eligible for a facility under CBILS, your business must meet the eligibility criteria for the Scheme, which includes:

  • be UK-based in its business activity;
  • have an annual turnover of no more than £45 million;
  • have a borrowing proposal which the lender would consider viable, were it not for the current pandemic;
  • self-certify that it has been impacted by the coronavirus (COVID-19); and
  • not be classed as a business or ‘undertaking’ in difficulty.

Importantly, access to the scheme is open to smaller businesses that previously would not have been eligible for CBILS because they met the requirements for a standard commercial facility. You may therefore consider re-contacting your lender if you have previously been unsuccessful in securing funding.

How do I apply?
CBILS is available through the British Business Bank’s accredited lenders, which are listed on the British Business Bank website.

In the first instance, you should approach your own provider – ideally via the lender’s website. You may also consider approaching other lenders if you are unable to access the finance you need.

Decision-making on whether you are eligible for CBILS is fully delegated to the accredited CBILS lenders. These lenders range from high-street banks and challenger banks to asset-based lenders and smaller specialist local lenders.

Note: Potential applicants should consider applying via the lender’s website in the first instance – telephone lines are likely to be busy and branches may have limited capacity to handle enquiries due to social distancing.

What supporting documents might I need to apply?
You will need to provide certain documents when you apply for a CBILS-backed facility. These requirements vary from lender to lender, but are likely to include:

  • Management accounts
  • Business plan
  • Historic accounts
  • Details of business assets

If you do not have everything listed here, a CBILS loan could still be an option to provide finance to support your business.

Note: For many customers approaching their existing lenders for a smaller facility, the process may be automated and therefore may not require the same level of documentation.

When can I access the scheme?
The Scheme went live on Monday 23 March 2020 for an initial period of 6 months. The Scheme has now been extended to 30 November 2020.

What types of finance are available and who offers which type?
CBILS supports a wide range of business finance facilities, including:

  • term loans
  • overdrafts
  • asset finance
  • invoice finance

Note: Not every lender can provide every type of finance listed. CBILS is available through the British Business Bank’s accredited lenders, which are listed on the British Business Bank website.

What fees and interest will I be required to pay?
There is no guarantee fee for SMEs to use CBILS. Interest and lender levied fees will be met by the Government for the first 12 months after drawdown of your facility via a Business Interruption Payment (BIP).

Interest rates will vary between lenders and will depend on the specific lending proposal. Please speak to your lender, who will be able to give you full details on what interest rates will be payable by you after the BIP has concluded.

Do I need to provide evidence that I have a viable business?
Yes. You must show in your borrowing proposal that were it not for the current pandemic, the lender would consider your business viable.

You must also self-certify that your business has been adversely impacted by the coronavirus outbreak.

Will I need security to get a CBILS-backed loan?
Under the scheme, lenders will not take personal guarantees of any form for facilities below £250,000.

For facilities above £250,000, personal guarantees may still be required, at a lender’s discretion, but:

  • they exclude the Principal Private Residence (PPR); and
  • recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied

For all facilities, including those over £250,000, CBILS supports lending to smaller businesses even where a lender considers there to be sufficient security. Where there is sufficient security available, it is likely that the lender will take such security in support of a CBILS facility.

A borrower’s/guarantor’s Principal Private Residence (PPR) cannot be taken as security to support a personal guarantee or as security for a CBILS-backed facility (but a lender may wish to do so to support a commercial facility alongside the CBILS-backed facility).

What do the rules around personal guarantees mean?
For CBILS facilities below £250,000, personal guarantees cannot be taken by lenders in relation to the facility under the Scheme.

For CBILS facilities above £250,000, personal guarantees may still be required, at a lender’s discretion, but they exclude the Principal Private Residence (PPR) and recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied.

A worked example to show what this change will mean in practice:

  • £1 million facility
  • Business pays off £400,000, then defaults, owing £600,000
  • Lender recovers £100,000 from other business assets secured, such as a debenture (e.g. stock), leaving £500,000 outstanding
  • Call on personal guarantee is £100,000 (20% – not the full £500,000 as previously), leaving £400,000 as a loss
  • Government covers £320,000, lender loses £80,000

Is a CBILS facility available to existing customers of participating lenders or can an SME that is not an existing customer still apply?
CBILS is open to all eligible borrowers – your business does not need to be an existing customer of the lender you are approaching.

Can CBILS be used to refinance an existing commercial facility?
You can, in certain circumstances, use a CBILS facility to refinance existing debt. For example, where you are seeking to put your business on a more stable financial footing and/or improve your working capital position, then, in principle, a CBILS facility could be provided, providing you fulfil the eligibility criteria for the Scheme.

Refinancing can be undertaken with or without an increase in the original borrowing. Any refinancing will be treated as a new facility and the application will need to meet the eligibility criteria for a CBILS facility.

Eligibility criteria

What types of businesses is CBILS for?
CBILS is designed to support a wide range of smaller businesses (i.e. with an annual turnover of less than £45 million) across the UK who have been impacted by the Coronavirus crisis.

What is the definition of an SME for CBILS?
Under CBILS, the definition of SME is confined to the turnover of an applicant (or an applicant’s group), which must not exceed £45 million. The borrower cannot be an individual other than where the individual is a sole trader or a partner in a partnership and is acting in a business capacity.

One of the eligibility criteria is for the business to have an annual turnover of no more than £45 million. Would the £45 million turnover threshold be measured on the entirety of the Group or could the funding be taken by a single operating subsidiary? Can the different companies within the group access their “own” guarantee?
If your business is part of a group, controlled on either a legal or de facto basis, the maximum turnover applies to the group undertaking. More than one company within the group can be considered for a CBILS facility but only if the consolidated group turnover does not exceed the £45 million annual turnover threshold. The qualifying period is 12 months preceding application.

What if my business has turnover of more than £45m and I would not be eligible for CBILS?
The Coronavirus Large Business Interruption Loan Scheme (CLBILS) is available for facilities of up to £50 million to firms with an annual turnover above £45 million. Find out more about CLBILS.

What is “turnover” for the purpose of checking eligibility for CBILS?
If it is a sole enterprise it is the turnover of the applicant only, as shown in the latest set of accounts. For applicants acting as part of a group, that have partners or linked enterprises, the turnover assessment should take the latest turnover of the applicant, as shown in their accounts, together with the turnover of any linked enterprises, any partners of any linked enterprises, any enterprises linked to any of the applicant’s partners and any enterprise linked to the applicant’s linked companies.

What is a “sole enterprise”?
A sole business (for the purposes of CBILS) is one that holds no more than 25% of the capital or voting rights (whichever is higher) in one or more other businesses; and/or other businesses hold no more than 25% of the capital or voting rights (whichever is higher) in them; or it is not linked to another business according to the criteria for “linked enterprises”.

In addition, certain investors may individually have a stake of up to 50% in the business and it may still be considered a sole business[4] : public investment corporations, venture capital companies[5] and business angels[6] (provided the investment is less than €1.25 million), universities and non-profit-making research centres, institutional investors, (including regional development funds)[7] ,or autonomous local authorities (with an annual budget of less than €10 million and fewer than 5,000 inhabitants).

What is a “linked” business?
Linked businesses form a group by controlling the majority of voting rights of an enterprise, either directly or indirectly; or being able to exercise dominant influence over an enterprise.
Enterprises are linked when one holds a majority of the shareholders’ or members’ voting rights in another; or can appoint or remove a majority of the other’s administrative, management or supervisory body; or there is a contract between them enabling one to exercise a dominant influence over the other; or one can exercise sole control over a majority of shareholders’ or members’ voting rights in another. A typical example is a wholly owned subsidiary.
An enterprise is indirectly linked to a business if it is directly linked to an enterprise that is linked directly to the business.

What is a “partner” business?
A “partner” business is an enterprise that has certain financial partnership with another, without one exercising effective direct or indirect control over the other. They are not sole enterprises or linked enterprises.

This is the case where both hold 25% or more of the capital or voting rights in each other; and are not linked to other enterprises. Among other things, their voting rights in each other do not exceed 50%.

Are sole traders/freelancers eligible?
Provided that they satisfy the other eligibility criteria for the Scheme, CBILS is open to:

    • sole traders
    • freelancers
    • bodies corporate
    • limited partnerships
    • limited liability partnerships, and
    • any other legal entity carrying out business activity in the UK with:
    • an annual turnover up to £45 million, and
    • business activity operating through a business account operating in any sector[8]

The business must generate more than 50% of its turnover from trading activity.

Does CBILS require that all eligible companies generate a certain percentage of annual turnover from trading activities?
Yes, an eligible SME must generate more than 50% of its income from trading – the sale of goods or services. CBILS is not designed to support shell companies. Registered charities and further education establishments are exempt from this requirement.

Is the scheme appropriate for start-ups?
Potentially, if your business activity is primarily UK-based. For early-stage businesses in their first two years of trading, the British Business Bank’s Start Up Loans programme (loans from £500 to £25,000 at interest of 6% per annum) may be more suitable.

Visit startuploans.co.uk for more information.

Can companies that have received support from the Enterprise Investment Scheme (EIS) apply for CBILS?
Companies that have received funding through EIS are in principle eligible for support from CBILS, provided that they satisfy the other eligibility criteria of the Scheme.

Are further education establishments (including sixth form colleges and vocational training establishments) eligible?
Further education establishments are in principle eligible, provided that they satisfy the other eligibility criteria of the Scheme.

Note: Further education establishments are exempt from the requirement that 50% of the applicant’s income must be derived from its Trading Activity.

Are charities eligible?
Charities are in principle eligible, provided that they satisfy the other eligibility criteria of the Scheme.

Note: Registered Charities are exempt from the requirement that 50% of the applicant’s income must be derived from its Trading Activity.

Are housing associations eligible for CBILS?
Housing associations are in principle eligible, provided that they satisfy the other eligibility criteria of the Scheme.

Are financial services firms eligible for CBILS?
Financial Services firms are in principle eligible, including non-bank financial institutions, (secured and unsecured lenders); FCA-regulated financial intermediaries (such as credit brokers, finance houses, equipment renting/leasing businesses, financial intermediation firms); and firms that offer independent financial advice/services on financial matters (for instance accountants, auditors, mortgage brokers), provided that they satisfy the other eligibility criteria of the Scheme.

However, deposit-taking banks, building societies and insurers writing contracts of insurance as principal are not eligible for CBILS.

Are membership organisations eligible for CBILS?
Business, employer, professional, religious or political membership organisations or trade unions are in principle eligible, provided that they satisfy the other eligibility criteria of the Scheme.

Are public-sector organisations eligible for CBILS?
If the organisation is classified as a public-sector organisation by the Office of National Statistics, it is not eligible for CBILS.

Are exporters eligible?
Export businesses are in principle eligible, provided that they satisfy the other eligibility criteria of the Scheme. For asset finance and invoice finance under £30,000, the facility cannot be used for certain activities outside of the UK. A borrower may self-certify the loan isn’t going to be used for these purposes.

If a company with UK employees exports over 80% of its services, does this class as a UK business activity?
Yes, it does. This would be a UK trading activity even if the company’s income comes wholly or mainly from exporting.

Is an SME based overseas eligible?
An SME which is foreign-owned is in principle eligible to apply for CBILS, provided it is trading in the UK (not just selling into the UK and has the core of its business operations in the UK) and uses the CBILS facility to support its business activity in the UK. The same is true for an SME which has UK ownership but is registered abroad.

Is a company that derives income from property eligible for CBILS?
If it derives more than 50% of its income from commercial activity that generates turnover, whether or not this is with the intention of making a profit. This includes real-estate SMEs that derive income from property (including real-estate investment companies and housebuilders).

Are businesses with private equity investment eligible under the CBIL Scheme, subject to them meeting the CBILS eligibility criteria?
If a business has a private equity investor, even where that investor holds a majority or controlling stake, they can still be eligible for CBILS, provided that they satisfy the other eligibility criteria of the Scheme.

When assessing the £45 million turnover eligibility threshold, the business will be considered separately to the private equity investor, and its other investments. If the business’s turnover is below that threshold, they can be eligible for the CBILS, provided they meet the other eligibility criteria.

To determine the maximum amount available to a business under CBILS, the business is treated as standalone from its private equity investor, and the other businesses it may have invested in. Therefore the £5 million maximum loan size applies to that business only.

State aid and business/undertaking in difficulty

I have had de minimis aid in the past. Can I still get a loan?
Yes, as long as you meet the scheme’s eligibility criteria. Any previous de minimis State aid does not impact your eligibility for CBILS and the lender does not need to take it into account.

CBILS operates as a notified scheme rather than under de minimis, as EFG did. There is no interaction between any de minimis State aid a business previously received and the size of the CBILS facility it can access, should it be eligible.

I am getting other kinds of aid to help respond to the coronavirus. Can I still get a loan?
Yes. You will still be eligible for a loan but certain payments you receive may count towards the amount of Business Interruption Payment (BIP) – the payments the UK Government will make to cover interest and fees on your loan – you will be entitled to. In this instance, these payments are made under the Temporary Framework for State Aid measures to support the economy in the current Covid-19 outbreak.

When applying for a CBILS loan you will need to confirm that you (including any business in your group and any business under common control) have not received more than £711,200 (€800,000) in State aid under the State Aid Temporary Framework (or £106,680 (€120,000) in the case of businesses operating in the fisheries and aquaculture sector, or £88,900 (€100,000) in the case of businesses operating in the primary products of agriculture sector). If you have received aid under another Temporary Framework scheme you will have been informed as to the amount in your scheme documentation.

Which businesses meet the “business in difficulty”/ “undertaking in difficulty” criteria?
A business or undertaking in difficulty includes:

  • Individuals or companies that have entered into collective insolvency proceedings;
  • Limited companies which have accumulated losses greater than half of their share capital in their last annual accounts (this does not apply to SMEs less than 3 years old[9]);
  • Partnerships, limited partnerships or unlimited liability companies which have accumulated losses greater than half of their capital in their latest annual accounts (this does not apply to SMEs less than 3 years old);
  • Where the undertaking has received rescue aid and has not yet reimbursed the loan or terminated the guarantee, or has received restructuring aid and is still subject to a restructuring plan;
  • A company which is not an SME where, for each of the last two accounting years: i) your book debt to equity ratio has been greater than 7.5; and ii) your EBITDA interest coverage ratio has been below 1.0.
    From 30 July 2020, the business in difficulty test does not apply to micro or small businesses. Micro and small businesses are businesses that have fewer than 50 employees and less than £9,000,000 in annual turnover and/or annual balance sheet total. However, to be eligible to the Coronavirus Schemes, micro and small businesses must not be (a) subject to collective insolvency procedure under national law, or (b) in receipt of rescue aid (which has not been repaid) or restructuring aid (and are still subject to a restructuring plan) at the time they apply for a scheme facility.

New guidance issued on 25 September 2020 allows for the ‘undertaking in difficulty’ assessment to be determined at the date of application for a scheme facility. This means that a business that was an ‘undertaking in difficulty’ on 31 December 2019 but, at the date of application for a scheme facility, is no longer an ‘undertaking in difficulty’ will now be (in principle) eligible for the scheme.

What does the accumulated losses criteria for an “undertaking in difficulty” mean?
The definition of an undertaking in difficulty includes businesses which have accumulated losses greater than half of their share capital.

For a limited liability company, this is where more than half of its subscribed share capital has disappeared as a result of accumulated losses. This is the case when deduction of accumulated losses from reserves (and all other elements generally considered as part of the own funds of the company) leads to a negative cumulative amount that exceeds half of the subscribed share capital.

What are “collective insolvency proceedings”?
These are as defined by the Commission Regulation (EU) 2015/848 of 20 May 2015, rather than the definition of “insolvency proceedings” in the Insolvency Act 1986. This means:

  • winding-up by, or subject to the supervision of, a court
  • creditors’ voluntary winding-up (with confirmation by the court)
  • administration
  • voluntary arrangements under insolvency legislation
  • bankruptcy or sequestration

The “voluntary arrangements” above include company and individual voluntary arrangements.

Receiverships, members’ voluntary liquidations and schemes of arrangement (under Part 26 of the Companies Act 2006) are not included.

What does “fulfils the criteria under its domestic law” mean in collective insolvency proceedings?
There is no official guidance from the European Commission on what this means. However, if a borrower is the subject of any of the proceedings listed above, or is not subject to any insolvency proceedings, but meets the criteria above, the borrower should be categorised as an “undertaking in difficulty”.

What defines rescue aid or restructuring aid?
Rescue or restructuring aid is normally the subject of a specific State aid approval from the European Commission. For the avoidance of doubt, aid provided under the Enterprise Finance Guarantee Scheme is not rescue or restructuring aid.

Which companies can be classed as SMEs for the “undertaking in difficulty” definition?
This can include self-employed people; family businesses; and partnerships or associations regularly engaged in an economic activity. It also includes medium-sized business that employs fewer than 250 people and has an annual turnover of no more than £45 million.

When is a company that is not an SME (because it has 250 or more employees) considered to be “in difficulty”?
A business that is not an SME will be in difficulty if, for the previous two years, the business’s book debt to equity ratio was greater than 7,5; and its EBITDA interest coverage ratio was below 1.0. A business must meet both of these ratios for both years to be classed as “in difficulty”.

SMEs are not required to meet these solvency ratios.

Should the tests for a “undertaking in difficulty” be on an individual or group basis?
An undertaking is a single economic unit, which may be an individual entity or a group of entities. Depending on your business, lenders may consider it appropriate to apply the test on an individual or a group basis.

Are there any exceptions to the accumulated losses test?
The accumulated losses test does not apply if the business is an SME that, on the date of assessment, had existed for less than three years; or is a trust or unincorporated association.

Are there any exceptions to a business having to be a “undertaking in difficulty”?
For asset finance and invoice finance facilities under £30,000, the “undertaking in difficulty” test (or the alternative test for micro/small businesses) does not apply as a facility of this level is considered to involve a de minimis amount of State aid.

How does the “undertaking in difficulty” test apply to a charity or non-profit organisation?
If a charity or non-profit organisation provides goods and services and is a limited liability company or an unlimited liability company, the test should be applied as with other companies. Where it undertakes its activity through a subsidiary, the tests should be applied on a group basis. If it is a trust or unincorporated association, the accumulated losses test does not apply.

Enterprise Finance Guarantee queries

What’s happening to the old Enterprise Finance Guarantee (EFG) Scheme?
For existing users of the EFG Scheme, nothing has changed. If you wish to apply for a financing facility, your lender will be able to assess if you are eligible under CBILS.

How is CBILS different from the EFG Scheme?
CBILS is a new scheme. It is different from EFG in a number of ways.

  • There is no guarantee fee for SMEs to use CBILS. Under EFG, the borrower paid a guarantee fee.
  • The Government will make a Business Interruption Payment to cover the interest and any lender-levied fees in the first 12 months of any CBILS facility.
  • This means smaller businesses will benefit from no upfront costs and lower initial repayments.
  • The maximum facility provided under CBILS will be up to £5 million. Under EFG, this was £1.2 million.

Under the scheme, lenders will not take personal guarantees of any form for facilities below £250,000. For facilities above £250,000, personal guarantees may still be required, at a lender’s discretion, but they exclude the Principal Private Residence (PPR), and recoveries under these are capped at a maximum of 20% of the outstanding balance of the CBILS facility after the proceeds of business assets have been applied. For all facilities, including those over £250,000, CBILS can support lending to smaller businesses even where a lender considers there to be sufficient security. Where there is sufficient security available, it is likely that the lender will take such security in support of a CBILS facility. A borrower’s/guarantor’s Principal Private Residence (PPR) cannot be taken as security to support a personal guarantee or as security for a CBIL-backed facility.

  • Access to CBILS has been opened up to those smaller businesses who would have previously met the requirements for a commercial facility but would not have been eligible for CBILS. Insufficient security is no longer a condition to access the scheme, which it was for EFG.
  • CBILS is available to businesses with an annual turnover of no more than £45 million. EFG was available to businesses with annual turnover of no more than £41 million.

Are there any restrictions on a borrower refinancing their EFG facility to a CBILS facility?
If you have a query about an active EFG facility, you should approach your own provider – ideally via their website, and not through the British Business Bank.

Any request for refinancing an existing EFG facility will be:

  • at each individual lender’s discretion
  • subject to certain limits, and you meeting the CBILS eligibility criteria

I have an existing EFG facility with my lender that I need to discuss. What do I do?
If you have a query about an active EFG facility, you should approach your current provider – ideally via their website, and not through the British Business Bank.

[1] Following earlier discussions with the banking industry, some lenders indicated that they would not charge arrangement fees or early repayment charges to SMEs borrowing under the scheme. HM Government greatly appreciates this approach by lenders.
[2] Fishery, aquaculture and agriculture businesses may not qualify for the full interest and fee payment.
[3] The following trades and organisations are not eligible to apply: Banks, insurers and reinsurers (but not insurance brokers); public-sector bodies and state-funded primary and secondary schools.
[4]An enterprise will not be categorised as an SME if 25% or more of its capital or voting rights are directly or indirectly owned or controlled, jointly or individually, by one or more public bodies (except those listed in a) to d) which can hold up to 50%).
[5] Following earlier discussions with the banking industry, some lenders indicated that they would not charge arrangement fees or early repayment charges to SMEs borrowing under the scheme. HM Government greatly appreciates this approach by lenders.A private equity/venture capital investment fund is a vehicle for enabling pooled investment by a number of investors in the equity and equity-related securities (such as quasi-equity) of companies (investee companies). These are generally private companies whose shares are not quoted on any stock exchange. The fund can take the form either of a company or of an unincorporated arrangement such as a limited partnership. In form, a private equity/venture capital company can either be a company or a limited partnership: a few are quoted on stock markets
[6] Business angels are private individuals who either solely invest their own cash in SMEs or alternatively invest in syndicates where typically one angel in the syndicate takes a lead role. Angels normally have no previous family connection with the business and make their own investment decision rather than making a decision through an independent manager. The lead angel of the syndicate or the angel investing alone will typically follow the investment after it is made by observing and providing his/her knowledge, experience and support to the investee company by way of mentoring assistance.
[7] The European Commission does not formally define the concept of ‘institutional investors’. They are, however, usually seen as investors which trade large volumes of securities on behalf of a great number of individual small investors and which have no direct involvement in the management of the firms in which they invest. The term ‘institutional investor’ refers mainly to insurance companies, pension funds, banks and investment companies that collect savings and supply funds to the markets, but the term also applies to other types of institutional wealth (e.g. endowment funds, foundations, etc.). Usually these have substantial assets and are experienced investors.
[8] The following trades and organisations are not eligible to apply: Banks, insurers and reinsurers (but not insurance brokers); public-sector bodies and state-funded primary and secondary schools.
[9]SMEs are defined as a business with less than 250 employees and either (a) a turnover of less than £44.45m or (b) a balance sheet of less than £38.22m.

British Business Bank plc is a public limited company registered in England and Wales, registration number 08616013, registered office at Steel City House, West Street, Sheffield, S1 2GQ. It is a development bank wholly owned by HM Government. British Business Bank plc and its subsidiaries are not banking institutions and do not operate as such. They are not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). A complete legal structure chart for the group can be found at www.british-business-bank.co.uk