Coronavirus Business Interruption Loan

More details on the Coronavirus Business Interruption Loan (CBIL) scheme/ support have recently been announced extending and simplifying the scheme, as well as removing the requirement for Personal Guarantees for loans under £250,000.

The Government extension to larger companies, (up to £500m turnover) is very welcome, and whilst the accredited lenders are doing what they can to accelerate and make the application process smooth, what is clear is that the viability test and the necessity to demonstrate serviceability post-coronavirus is challenging.

This viability test still requires considerable supporting information and explanations, and for those companies without a straightforward proposition some of it may be difficult to prepare. We have therefore assembled a team of experts to help in the following key areas.

  • Initial filtering to help companies understand if they will be eligible.
  • Modelling assistance and support / challenge on key assumptions in financial models.
  • Preparation and completion of the application for the CBIL scheme with a document that will comprehensively address the lenders criteria.

If you are interested in support please contact us at CBILSSupport.restructuring@rsmuk.com.

In view of the continued requirement for Accredited Lenders to lend responsibly there remains a 'viability' test as previously seen under the previous Enterprise Finance Guarantee (EFG) scheme. The new criteria includes the following wording, that companies must, 'Have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable the business to trade out of any short-to-medium term difficulty..'.

As this has had positive feedback and proved useful to some companies we produced a decision tree to support this viability test and we suggest that businesses prepare answers/ explanations to these questions in preparation for any application to the scheme. Please note this is for guidance only, as each individual lender will apply their own criteria, and additional information and questions are likely to be asked/ raised by individual lenders.

For more information on the Coronavirus Business Interruption Loan, please contact

Keith Marshall Keith Marshall

Partner

Gareth Harris Gareth Harris

Partner