Update : The CBILS and BBLS loan scheme are no longer accepting applications. You may however be eligible for a Recovery Loan.
Click here for more details on the recovery loans scheme.
Welcome back to the BCRS blog.
This week I will be giving clarity on the difference between two of the Government backed loan facilities (BBLS vs CBILS) that have been designed to support SMEs in the UK during the ongoing uncertainty that is the Coronavirus pandemic.
Over the last few months the Government have introduced a range of support mechanisms to enable businesses to continue. There is a need for businesses to access a substantial and fast injection of cash to support cashflow and safeguard jobs during these unprecedented times.
Government backed loan schemes:
Coronavirus Business interruption Loan Scheme (CBILS)
The Coronavirus Business Interruption Loan Scheme (CBILS) was announced in March 2020 and can provide facilities for smaller businesses (SMEs) across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cashflow with loans available between £50,001 – £5m to support the continued provision of finance to UK SMEs during the Covid-19 outbreak.
Bounce Back Loan Scheme (BBLS)
The BBLS was announced on 27th April 2020 and is a scheme aimed at micro businesses which are experiencing lost or deferred revenues as a result of the COVID-19 outbreak. It is designed to provide debt finance of between £2,000 and £50,000.
BBLS vs CBILS
Looking at the two schemes side by side, there are key differences which must be considered when deciding which is best for your business. These can be seen in the table below.
| Key features | BBLS | CBILS |
| Target audience | Early stage micro businesses (no specific turnover criteria) | SMEs with a turnover of less than £45m. |
| Finance provided | Finance between £2000 – £50,000 up to 25% of annual turnover. | Finance between £50,001 – £5m |
| Type of finance | Term loans only | • term loans
• overdrafts • invoice finance • asset finance |
| Lenders | Over 15 accredited lenders | Over 40 accredited lenders including BCRS Business Loans |
| How long does the government pay the interest | First 12 months | First 12 months |
| Early repayment fees | No | No |
| Personal Guarantee | No | For applications over £250,000 |
| Eligibility | Click to see BBLS eligibility criteria | Click to see CBILS eligibility criteria |
| Application process | • Businesses will fill in a short online application form and self-declare that they are eligible for the Scheme.
• Eligible businesses will be subject to standard customer fraud, Anti-Money Laundering (AML) and Know Your Customer (KYC) checks
|
• Businesses will need to provide lenders with a borrowing proposal with several supporting financial documents
|
| Scheme duration | Until November 2020 | 6 months (until September 2020) |
Applying for both schemes
You are unable to apply for both schemes. It is desirable to make a decision based on your own research and the information above to which loan you feel will be the most practical for your business. Of course, lending amounts play a huge part in this decision so I would recommend starting there if you are unsure.
What happens if you are refused a loan by a lender?
Just because you are refused a loan by one lender does not mean that another will do the same. For both schemes there is a baseline of eligibility, but each lender may require additional criteria to be met in order to offer you finance. Ultimately, it’s important to keep in mind that if one turns you down, you are still able to approach others within the scheme.
Please note that BCRS are NOT a Bounce Back Loan provider therefore we urge you to click here to find accredited lenders who may be able to help.
BCRS are an accredited lender for the CBILS scheme, providing funding to SMEs in and around the West Midlands from £50,001 -£150,000 with terms from 1-6 years. Please click here to find out more about our offering and eligibility criteria.
For more information regarding CBILS with other accredited lenders click here.
Click here to read more from the BCRS blog page.
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Published by – Lauren McGowan – Digital Marketing Assistant
