At Budget 2020, the Chancellor announced that a ‘Coronavirus Business Interruption Loan Scheme’ (CBILS) will temporarily replace the Enterprise Finance Guarantee (EFG), becoming available over the coming weeks. This is a significant initiative from government.
It will operate in a similar way to EFG and be provided by the British Business Bank, but will offer more attractive terms for both businesses and lenders, with the aim of supporting the continued provision of finance to UK businesses during the Covid-19 outbreak. All details have not yet been worked through with the banks but it is expected that it will be finalised in next few days.
In the mean time businesses should be prepared for a proposal to the banks with the following detail:
- Work out cashflow impact analysis
- Consider all cost mitigation or delay that can be deployed
- Consider impact over a 1 month/ 3 month / 6 month basis
- Are there any other contingency measures available or may be developed?
It is key that businesses set up a communication channel with their bank/ Relationship Manager as requirements for business will differ greatly.