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Make sure you beat the CBILS deadline

28th Aug 2020   ·   The ThinCats Team   ·   Insights

Following confirmation from the British Business Bank that CBILS applications must be received by lenders by 30 September, we’ve listed our top 5 tips to avoid missing the deadline and to ensure a smoother funding process.

1.       Start ASAP and use a corporate finance adviser

With time running out before CBILS deadline day on 30 September, it’s important to consider some basic questions such as how much you want to borrow, what you will use the funding for and how your business forecasts can demonstrate to a potential lender that you will be able to meet your interest payments after the first 12 month interest-free period.

If you are looking to borrow with a lender other than your existing bank, we always recommend using a corporate finance adviser or broker. They will quickly be able to identify the right type of lender for your needs and will help prepare an application that recognises lenders’ different lending policies, information needs and funding processes.

2.       Check CBILS eligibility and lender criteria

Not all businesses are eligible for CBILS so check the British Business Bank eligibility rules first. 

Check the criteria of your potential lender(s) to see that your business meets their key criteria such as minimum loan size, profitability, sector restrictions, loan to value or leverage ratios. See ThinCats criteria as an example. 

3.       Check the lenders’ key information requirements and provide at the point of application

As part of the British Business Bank audit requirements for accredited lenders, lenders need to demonstrate that they started the application process for all CBILS loans before 11.59pm on 30 September. Applications started after this date are not eligible for CBILS funding.

Although the funding process varies from lender to lender, each will require evidence that applications meet at least the CBILS eligibility tests and satisfy their key lending criteria.  Some may require information such as historic and forecast financials, recent management accounts and bank statements at the point of application.

We recommend that before submitting their CBILS applications advisers and/or borrowers check the key information requirements that lenders need to officially register applications for audit purposes. Borrowers that don’t supply this information may think they have beaten the deadline only to find out later that they missed out.

4.       Don’t wait until the last minute

As with all deadlines there is a temptation to delay taking action until the last minute. Given that lenders are already busy processing high volumes of CBILS applications, we would urge borrowers and their advisers to engage early with lenders and ensure all the initial application information required by the lender is supplied in good time ahead of 30 September.

5.       Prepare a flexible financial model

Although not all lenders will require a full financial model at the point of initial application, most will need it shortly afterwards, so we would encourage all borrowers to work with their corporate finance adviser to have this ready.

The model needs to incorporate the expected costs of servicing the loan that is being sought and be flexible enough to accommodate different business scenarios; for example what would be the impact on forecasted cash flow of further local or national restrictions due to Covid-19?

It’s also worth noting that there is a second CBILS deadline of 30 November by which lenders and borrowers must have completed the funding process. Given the high volumes expected, it makes sense to supply as much of the information needed by lenders as soon as possible in this process.

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