Coronavirus Business Interruption Loan Scheme change

The Coronavirus Business Interruption Loan Scheme (CBILS) was among the raft of measured announced by the Chancellor on 3 April to help firms affected by the Coronavirus crisis.

The Scheme aims to support long-term viable businesses who may need to respond to cash-flow pressures by seeking additional finance. Loans are provided by the British Business Bank, through participating providers.

Change in criteria

From 30 July 2020, criteria around the classifications of businesses in difficulty will change following recent EU changes in State Aid Law around the test for businesses. 

The amendment means that smaller businesses with fewer than 50 employees and less than £9,000,000 in annual turnover and/or annual balance sheet will not be considered undertakings in difficulty unless they are:

  • subject to collective insolvency procedure under national law, or
  • in receipt of rescue aid (which has not been repaid) or restructuring aid (and are still subject to a restructuring plan).

Businesses with more than 50 employees or more than £9,000,000 in annual turnover and/or annual balance sheet will still be subject to the ‘Undertaking in Difficulty’ test.

This change will apply from 30 July 2020, and means lenders may now be able to offer CBILS to businesses who had previously been unable to access the scheme.

The Bounce Back Loan Scheme is unaffected by this change.

To discuss this further, please get in touch with a member of our funding team on 01903 234094.