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Coronavirus Business Interruption Lending Scheme (CBILS) Working with Lenders to Mitigate Risk


Amid the ongoing coronavirus crisis, the government has unveiled a series of measures to help businesses cope with the almost inevitable disruption to trade. One of these is the introduction of the Coronavirus Business Interruption Lending Scheme (CBILS).

At BTG Advisory, we recognise the important role that professional advisors have to play in supporting UK businesses in the current social and economic climate. The availability of a formalised funding line to support management strategy will be key for businesses to navigate their way through the disruption of the next three to six months (and beyond), and with lenders also aiming to mitigate their risk.

BTG Advisory would like to remind lenders of our pre-lend review capabilities, as well as highlighting our ability to undertake accelerated ‘fast track’ reviews, to ensure that businesses can receive a credit decision from a lender in the shortest time possible.

Pre-Lend Review Services

For smaller credits, we do understand that the lender is unlikely to require any external input; however, for larger and more complex lending, a third-party review of the position may be required to support a credit sanction.

We propose a bespoke service that would be tailored to each lender, with the standard scope of the review being agreed with the lender at the outset and with accelerated reporting timelines to support immediate needs.

‘Fast Track’

By way of example, we would envisage that a standard ‘fast track’ scope would cover:

  •  Background on the company, including why the business has been impacted by COVID-19
  • Commentary on management track record
  • Previous viability trend analysis
  • Review of management strategy. Quantify request of the lender.
  • High-level forecast review and commentary (for the next 12 months)
  • Debt service capacity based on prior profitability trends (sensitised where appropriate)
  • Concise recommendation as to the way forward

Where panel arrangements with lenders are not already in place, BTG Advisory would operate on a preferred rate basis.

CBILS: Key Feature

Up to £5m facility: The maximum value of a facility provided under the scheme will be £5m, available on repayment terms of up to six years.

80% guarantee: The scheme provides the lender with a government-backed, partial guarantee (80%) against the outstanding facility balance, subject to an overall cap per lender.

No guarantee fee for SMEs to access the scheme: No fee for smaller businesses. Lenders will pay a fee to access the scheme.

Interest and fees paid by government for 12 months: The government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees.

Finance terms: Finance terms are up to six years for term loans and asset finance facilities. For overdrafts and invoice finance facilities, terms will be up to three years.

Security: At the discretion of the lender, the scheme may be used for unsecured lending for facilities of £250,000 and under. For facilities above £250,000, the lender must establish a lack or absence of security prior to businesses using CBILS. If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.

The borrower always remains 100% liable for the debt.

CBILS: Criteria

Smaller businesses from all sectors can apply for the full amount of the facility. To be eligible for a facility under CBILS, an SME must:

  • Be UK-based in its business activity, with annual turnover of no more than £45m
  • Have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable the business to trade out of any short-to-medium-term difficulty

Please note: If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.

For Further Information

For further information on the BTG Advisory pre-lend review service, please contact:

Andrew Dalton
0843 320 9194
[email protected]

Martin Barron 
0843 320 9199           
[email protected]

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