Posted May 22, 2020

Semi-Exclusive Offering: Spread The Cost of CBILS Borrowing Over 25 Years


The outbreak of coronavirus has impacted individuals, businesses and entire industries across the UK. Even with the introduction of the government’s new coronavirus rating system and preparations to move the country out of lockdown, the last few months of economic impact has been tough.

It is no secret that COVID-19 has affected the UK economy substantially. With key features of the UK economy such as the hospitality sector and the property industry having to pause, or stop business altogether, the financial impact has been felt by businesses everywhere.

SMEs power our economy, and this is why the government’s Coronavirus Business Interruption Loan Scheme (CBILS) has been a vital and necessary source of support during these unprecedented times.

On Tuesday 26th May, a lender is launching a new and semi-exclusive CBILS proposition, which allows you to spread the cost of borrowing over 25 years.

This unique offering is only available through select specialist brokers, and we are pleased to announce that we are one of them.

What is CBILS?

The Coronavirus Business Interruption Loan Scheme is designed to support the continued provision of finance to UK SMEs during the outbreak of coronavirus. Lenders are able to provide facilities up to £5m to businesses that have been financially impacted by COVID-19.

The Government is also offering Business Interruption Payment (BIP) to cover the first 12 months of interest payments. This means businesses will, if they elect to accept the payment, benefit from no upfront costs or payments in the first twelve months with lower initial repayments.

In order to be eligible for this CBILS facility, you must:

  • Be UK-based in your business activity
  • Have an annual turnover of no more than £45 million
  • Self-certify that you have been adversely impacted by COVID-19
  • Not have been classed as a “business in difficulty” on 31 December 2019

What makes this lender’s CBILS offering different?

This proposition is different to other lenders in that they require a 1st legal charge over a commercial property.

In taking this, they can spread the cost of borrowing over 25 years rather than the 6 years, as is the case with many other lenders. This means that the stress testing / debt service coverage ratio is more achievable.

The CBILS loan can be also used to refinance existing debt with other lenders, as well as raise capital for COVID-19 income/profit loss in order to meet cashflow requirements over the next 18 months.

Other key features of this lender’s CBILS proposition include:

  • The loan amount is limited to 70% of the commercial asset value (limited to 25% of 2019 turnover, or 18 months cashflow + existing debt)
  • Loan term of 5 years & interest only can be requested
  • Set up fees covered by BIP
  • 12 months interest covered by BIP
  • Valuations and legal costs covered by BIP
  • Indicative rate margin of 3% or lower
  • Commercial property purchase considered where clients currently renting
  • Bounce back loans can be refinanced within this product

Specialist Financial Broker

As one of their specialist financial brokers, we can provide our clients with semi-exclusive access to this lender’s CBILS proposition and help provide certainty during these difficult times.

Call us today on 0121 309 0444 to discuss your options with an expert.