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What can you do if you are turned down for CBILS?

Published on 30th March 2020

Businesses across the UK are taking steps to reduce the risk of coronavirus to staff and customers through a series of practical measures. Social distancing is vital – as is taking extra precautions to ensure surfaces remain clean and asking customers to use contactless payments instead of cash to reduce the risk of contamination. 

But even though you may be working to keep your premises and staff - and customers - safe, self-isolation means that it is inevitable that there will be less business done.

If customers don’t come in - and if suppliers are not supplying and deliveries not being made - you could find yourself in a cashflow crisis and your business on the brink of disaster as a direct result of the coronavirus.

It's not all bad news

Help is available - the Government announced the launch Coronavirus Business Interruption Loan Scheme,  or CBILS, from 23rd March. 

You may be able to borrow up to £5m through the Scheme.

This is a loan guarantee scheme that provides financial support to smaller businesses that have lost revenue and are potentially facing a cashflow crisis as a result of the COVID-19 outbreak. It provides loans that will be interest-free for 12 months, with the government promising to underwrite 80% of the loan should a business fail following the crisis.

If a lender can provide finance on normal commercial terms they will, with that loan usually supported by a personal guarantee from the company directors. If not, the lender can decide whether a business can be supported by CBILS and seek to use the scheme to alter a negative credit decision.

To be eligible the business must:

  • Have a UK base
  • Have a turnover of no more than £45 million per annum
  • Be in an eligible industrial sector
  • Have a sound borrowing proposal - but insufficient security to meet a lender’s normal requirements
  • Have not received state aid above €200,000 over past two years

The criteria for borrowing are flexible. Lenders have been instructed to judge applications by the business’s previous performance, which means that if you were running a successful business before the crisis, you could be well placed to request the funds you need now. 

The scheme is a part of a wider package of government support for UK businesses and employees, and applies to business loans and other types of finance such as overdrafts, Invoice Finance and Asset Finance. You can apply to the commercial lenders who will be working with the government to provide the funds yourself – or call us at Rangewell to get our expert support.

But you must remember, this is a loan like any other, and you will need to repay it, even if it is interest-free for the first 12 months. What’s more, the guarantee from the Government only covers 80% of the total lent, so the lender will still be taking a risk on the remaining 20%. If they don’t feel that your business is a good risk, they will not be prepared to make the advance you need. It is still early days yet for the scheme, which has been rushed through to help deal with the emergency. This means that the and full details of how it will work are not fully understood. 

There have also been questions asked, perhaps if you are not able to clearly demonstrate the impact of the COVID-19 outbreak on your business for instance. 

There have also been concerns over how widely it is likely to be available, and whether it will be simple and fast enough to provide the lifeline that businesses need now. 

So what can you do if you cannot secure funding under CBILS?  

Rangewell can help

At Rangewell, we are specialists in business finance - we find all types of funding for all types of business. In the current crisis, we are helping businesses of all kinds find the funding they need with lending backed by CBILS. Naturally, there are delays getting through to some lenders – and more delays while they set up the internal systems they need.

Our direct contacts to key decision-makers in the leading banks participating in the CBIL scheme can help fast track your application, possibly saving you the frustration of waiting weeks for a decision, and potentially bringing you the funds you need in time to save your business.  

But we are committed to helping all the businesses that come to us if we can – and we know that even if you find that you don't qualify or are declined for funding under the scheme, there may still be other forms of business finance for which you may still qualify.

Receiving a decline under CBILS may be a setback – but it does not have to be a disaster for your business. 

We can help you secure a wide range of business funding, including:

Cashflow support funding - to provide a reserve of cash to tide your business over when income is reduced - as it will be currently. This will usually take the form of a short-term, unsecured loan designed to be paid back when trading improves.

Revolving Credit Facilities allow you to borrow and repay funds as required, much the same as an old-style bank overdraft. A Revolving Credit Facility can be a simple way to increase your financial flexibility, allowing you to withdraw the cash as you need it, and with no changes when you do not.  

Asset Refinance - can help you raise cash by releasing it from assets - which can include equipment or vehicles that you have already acquired. Asset Refinance works by you sell the asset to the finance company in return for cash and then buy it back with an HP agreement, giving you the chance to borrow the money you need at a rate that is low because of the security provided by your assets.

Commercial Mortgages of your business premises can be used in a similar way to Asset Refinance to raise large capital sums.

Invoice Finance - when business is slow, getting paid fast becomes all the more important. Invoice Finance provides an immediate cash payment by the lender when you invoice a customer or client for work done, no matter how long it takes for them to pay.

Getting professional help with your finance needs

At Rangewell we help secure all types of funding for all types of business – and during the current crisis, we can provide the quickest way to find the funding you need.

Call us now – our experts are ready to help you with your finance problems during the coronavirus crisis.

We understand the pressures you are under – and our service is absolutely free.


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