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Answers to key questions you may have about CBILS and BBlS

CBILS and BBLSThe government’s Coronavirus Business Interruption Loan Scheme (CBILS) and Bounce Back Loans Scheme (BBLS) were launched to provide UK businesses with short- and long-term working capital support.

However, as newly-created financial mechanisms, information about their usage has only emerged over time. Be the Business has partnered with Morrison & Foerster, an international law firm, to answer the most pertinent questions relating to CBILS and BBLS.

If you have a CBILS and BBLS question that is not answered below then please submit it using our online survey. While we cannot commit to answering every question, we will do our upmost to support you with your query.

We start with a general look at the main differences between CBILS and BBLS, after which follow a range of queries laid out in an easy to digest drop-down format.

This information, brought to you in partnership with Morrison & Foerster, is provided for general information only. It is not intended to amount to advice on which you should rely. Neither we nor Morrison & Foerster act as legal advisor those who accesses the content on our site. Please see our full terms and conditions below and our more detailed website terms of use.

What are the main differences between the CBILS and BBLS that businesses should be considering?

The BBLS and the CBILS are both government-backed loan schemes, administered by the British Business Bank, that have been implemented to combat the economic impact of coronavirus. Under both schemes, accredited lenders – many of which are the same for the BBLS and the CBILS – provide loans that are guaranteed by the UK government, with the government covering the first 12 months of interest payments and fees. There are, however, a number of key differences between the BBLS and CBILS, summarised in the table below:

BBS and CBILS comparison

  1. For further information about types of loans and what might be appropriate for your business, see “When will the various types of finance be appropriate for my business?” and “How long, on average, have lenders taken making decisions and depositing cash?
  2. In addition, lenders cannot advance more than 25 per cent of turnover
  3. Additionally, the amount requested must be no more than: twice the applicant’s 2019 (or predicted first two years’) wage bill; no more than a quarter of the applicant’s 2019 total turnover; or the amount which the applicant would need to cover its regular expenses over the next 18 months (or, if the applicant is an employer of more than 250 people, 12 months)
  4. The government guarantee means that where the borrower is unable to repay the loan (e.g. goes insolvent), the government will pay the lender. This largely removes the lender’s downside risk, making lenders more likely to provide finance
  5. Personal guarantees are guarantees provided by individuals or entities that are not the borrower. A lender may ask for guarantees from, among others, the owners of businesses or from management. If the borrower fails to pay the loan, then the guarantor will be obliged to fulfil the borrower’s obligations

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