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Key statistics surrounding CBILS/BBLS lending during the Coronavirus pandemic

Posted by Todd Davison on Jan 20, 2021 1:10:09 PM

The Government’s fiscal measures introduced in response to the shock of the pandemic – in particular the Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loan Scheme (BBLS) – have helped to bridge the revenue gap for many viable businesses that might have otherwise found themselves in jeopardy.

The schemes have not only helped to keep businesses afloat, they’ve enabled some firms to lay the foundations for success once demand rises again.

Alex Ratcliffe from Bristol took out a Coronavirus Business Loan to keep his furniture production company, Konk Furniture, going. He told This is Money:

“'The loan has given us a sense of security above anything else. We are also planning to use it for upgrading our workshop machines, investing in new designs and prototyping some new products.”

While providing some much-needed reassurance, being accepted for a Coronavirus Business Loan has also given many business owners a confidence boost. “It shows the growth and potential of what we do,” said entrepreneur Hannah Carter who runs Alternative Foods London.

 

How many businesses have taken out a Coronavirus Business Loan?

The Government’s figures on the number of approved applications for both the CBILS and the BBLS are being updated all the time. But with the closing date of 31st March 2021 for both schemes – almost exactly a year after they were launched (23rd March 2020) – it won’t be long before we have some final numbers.

The Government’s data was last updated on 13th December 2020, which shows:

     - Of the 186,522 applications through the CBILS, 82,618 were approved, with some £19.64bn having been awarded to successful applicants.

     - Of the 1,887,967 applications through the BBLS, 1,431,987 were approved, with some £43.54bn having been awarded to successful applicants.

If you’re considering making an application before the deadline, it might be helpful to know the facts and figures of both schemes.

 

BBLS:

     - Eligible SMEs can borrow between £2,000 and up to 25% of their turnover.

     - The maximum loan available is £50,000.

     - The Government guarantees 100% of the loan and there won’t be any fees or interest to pay for the first 12 months.

     - After 12 months the interest rate will be 2.5% a year.

     - Lenders cannot ask for personal guarantees.

     - ‘Pay as You Grow’ will allow businesses to extend the length of their BBLS loans from six to ten years, cutting monthly repayments in half.

     - Businesses can pay interest-only repayments for up to six months and struggling businesses will have the option to apply for BBLS payment holidays, suspending repayments altogether for up to six months.

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CBILS:

     - Available to UK-based businesses with an annual turnover of at least £100,000 up to £45 million.

     - The maximum loan available is £5m.

     - Repayment terms of up to six years.

     - Interest rates are set by individual lenders.

     - 12-month interest-free payment holiday.

     - Lenders cannot ask for personal guarantees for facilities of £250,000 or less.

 

Should you apply for a Coronavirus Business Loan before the deadline?

Ultimately, you know your business better than anybody else. So, it’s a risk-assessment exercise based on projections of how you see your business moving forward over the next couple of years.

That might not be an easy assessment to make right now with it still unclear just how quickly the UK economy will bounce back. However, the early success of the vaccine rollout has given some cause for optimism, with some economic experts suggesting this could see the UK economy open up earlier and therefore recover more quickly than other G7 countries.

If applying for a CBILS for funds greater than £250,000, lenders are permitted to request a Personal Guarantee from the Director in support of the facility. However, you can mitigate the risk of signing a Personal Guarantee – rather than let this be a barrier to securing the funds – by taking out Personal Guarantee Insurance.

Purchasing this insurance policy will help to reduce the risk to your personal estate, leaving you to get on with running your business. Purbeck covers up to 80% of your risk, so you’re personally protected as you plan the future growth of your business.

Purbeck Insurance is a specialist Personal Guarantee Insurance underwriter, authorised and regulated by the Financial Conduct Authority. We work alongside lenders and brokers to provide a bespoke insurance solution based on the lender’s individual requirements and risk profile. Please contact one of our specialists today to learn more on 0208 004 7250.

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