The government has announced that the Coronavirus Business Interruption Loan Scheme (CBILS) will be extended again, with the initiative now open for applications until 31 January 2021. The scheme is part of a support package for businesses that has seen £200bn injected into the UK’s economy so far.

The latest extension comes as part of a raft of new proposals to support the economy during England’s second lockdown, which began on 5 November and is planned to end on 2 December. Non-essential retail outlets, hospitality and entertainment venues, accommodation providers, and leisure and sports facilities are among the businesses that must remain closed.

Previously, companies had to apply to accredited lenders by 11.59pm on 30 November, with providers given until 31 December to supply funding. Firms must now register their interest in a loan by 31 January, with lenders required to fund any successful applications by 31 March.

The chancellor, Rishi Sunak, initially extended the scheme from its original deadline of 30 September to 30 November, saying that this would make it easier for lenders to give businesses more time to repay their loans. Announcing the latest measures as the second lockdown began, Sunak said that “the economic effects are much longer-lasting for businesses than the duration of any restrictions”, adding that his proposals aimed to “give people and businesses the certainty they need over what will be a difficult winter”.

All of the government’s loan schemes – CBILS, the Coronavirus Large Business Interruption Loan Scheme (CLBILS) and the Bounce Back Loan Scheme (BBLS) – have been extended to 31 January. In all cases, the government’s guarantee covers 80% of each loan for ten years.

The new measures include:

• the extension of the Coronavirus Job Retention Scheme (better known as the furlough scheme), which pays employees 80% of their salary for hours not worked, until the end of March 2021;

• an increase in the Self-Employment Income Support Scheme (SEISS), with the third grant (covering November to January) calculated at 80% of average trading profits, up to a maximum of £7,500;

cash grants of up to £3,000 a month for businesses that must remain closed, worth a total of more than £1bn each month;

• and £1.1bn for local authorities to distribute in the form of one-off payments (calculated on the basis of £20 a head), to support businesses more broadly.

Practically speaking, the definition of “applying before the deadline” for a government-backed loan varies between providers (perhaps emphasising the wisdom of submitting your information in good time). BOOST&Co’s partner Growth Lending, which is an accredited lender for CBILS and offers three products under the scheme (term loans, invoice financing and revolving credit facilities), asks that businesses complete its online application form before the January deadline.

CBILS – the success rate so far

The scheme was launched in March, shortly after the coronavirus pandemic began, with the aim of helping companies that have suffered disruption to their cash flow as a result of Covid-19. It provides loans of up to £5m through more than 40 accredited lenders. The government guarantees 80% of each loan and pays all of the fees and interest for the first 12 months.

The most recent statistics on CBILS, covering the period to 18 October, show that the approval rate for loans is 46%. Around 73,000 of just under 160,000 applications have been approved, with lenders providing £17.2bn in funding to UK SMEs.

For comparison, the Coronavirus Large Business Interruption Loan Scheme (CLBILS) has a higher approval rate (60%), although the pool of applicants is much smaller (57% of 1,034 applications were successful over the same period). More than £40bn has been provided under the Bounce Back Loan Scheme (BBILS), but there has been controversy around the initiative, which offers loans of up to £50,000, “no questions asked”, and is reported to have attracted significant fraud.

(For more details on the differences between CBILS, CLBILS and BBILS – and which scheme could be right for your business – read this article by our Bristol-based principal Sinead Johnson.)

Working capital, M&A… if you’re ready to grow, apply today

BOOST&Co’s partner Growth Lending is an accredited lender for CBILS – and these loans can be used in ways you may not expect. Although the initiative was created to help companies recover from the economic turmoil caused by the pandemic, the funds can also be used for growth, explains principal Ryan Sorby, the head of BOOST&Co’s Manchester office.

“Business owners may have discounted CBILS because they thought the scheme was only intended to cover the immediate impact of Covid-19, but it does provide a huge opportunity for firms that still want to grow,” he says. “If that means making an acquisition or investing in people, for the benefit of both your company and the UK, then that’s absolutely what the scheme can be used for.”

In fact, we are actively encouraging businesses with ambitious growth strategies to consider using CBILS loans to implement their plans. This type of funding can be used to support a wide variety of goals, but it is particularly well suited to mergers and acquisitions, an area in which activity is beginning to bounce back, as BOOST&Co’s London-based principal Joanna Scott explains here.

Smaller lenders can provide larger amounts

Companies seeking CBILS funding may benefit from applying to an alternative lender such as Growth Lending, which was founded to support UK SMEs where traditional banks could not. The platform specialises in working with innovative, fast-growing firms, and its swift, agile approach to funding offers more flexibility than traditional banks, which were criticised after the launch of CBILS for being initially slow to lend.

“If businesses are seeking loans to mitigate the impact of Covid-19, plus additional funding to continue to implement their growth strategies, they need a larger amount than mainstream lenders have been willing to provide,” Sorby says. “Those lenders have a role, but we can provide a level of funding that helps SMEs to deliver fantastic plans for growth.”

So, now you have an additional two months to apply for a CBILS loan, think about whether this funding could help your firm to adapt to the “new normal” and take its next steps. Growth Lending is keen to hear from any companies that are looking for funding to help them not just survive, but also thrive.

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