Only 1 in 5 Companies Granted Emergency COVID-19 Funding

April 24, 2020 / News & General

Issues have been raised about the Coronavirus Business Interruption Loan Scheme (CBILS) after figures released by banking lobby group UK Finance show that just one in five UK businesses who have applied have been granted funds.

Critics are arguing that the programme is failing to get money out fast enough to support struggling firms despite the fact that a total of 6,020 loans worth £1.1bn have been issued so far.

Only 21% of the 28,460 formal applications had so far been approved for funding but it’s thought around 300,000 companies are interested in the scheme.

More than 40 lenders are issuing CBILS loans. However, a survey released on Wednesday by the British Chambers of Commerce showed that just 2% of respondents had successfully accessed the CBILS programme.

Labour’s shadow business secretary, Ed Miliband, said: 

“These figures show that the CBIL scheme is simply not working well enough. We need change now. The chancellor must move to a 100% guarantee of loans for smaller businesses as other countries have done. In this economic emergency, it is the right thing to do. In the coming days, businesses are facing critical decisions about their future.”

What is the coronavirus business interruption loan scheme (CBILS)?

The Coronavirus Business Interruption Loan Scheme (CBILS) is designed to support small and medium-sized businesses by giving them access to loans, overdrafts, invoice finance and asset finance of up to £5 million for up to 6 years.

The Business Interruption Payment covers the first 12 months of interest payments and any lender-levied fees to ensure no upfront costs and lower initial repayments.

The scheme is delivered through commercial lenders, backed by the government-owned British Business Bank with the government providing lenders with a guarantee of 80% on each loan, subject to pre-lender cap on claims.

Am I eligible for funding help?

The government outlines the following criteria to be eligible for the Coronavirus Business Interruption Loan Scheme (CBILS):

  • your business is based in the UK
  • your business has an annual turnover of up to £45 million
  • your business has a borrowing proposal which the lender would consider viable, if not for the coronavirus pandemic
  • you can self-certify that your business has been adversely impacted by coronavirus

You can apply here.

If you are not eligible, you may be able to get other funding help during this time. You can check on the government website here.

What are my other options?

Whilst the government has issued various support measures for companies, some companies will no doubt be weighing up their options. 

As Licensed Insolvency Practitioners, we provide confidential advice for struggling companies. We’ll take the time to understand your situation, give you free advice and recommend the best solution for you.