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Top tips for SMEs to beat the CBILS application rush

27th Aug 2020   ·   The ThinCats Team   ·   News

Last month the British Business Bank confirmed 30 September as the deadline for businesses to submit applications for the Coronavirus Business Interruption Loan Scheme (CBILS). The loan scheme was launched by the government in March to facilitate funding to SMEs impacted by Covid-19. Key benefits include payment by the government of the borrower’s first 12 months interest, legal and lender fees.

With less than one month to go ThinCats, the leading alternative lender to mid-sized UK SMEs, has issued five top tips to help businesses and corporate finance advisers beat the deadline and minimise potential delays in the funding process.

Amany Attia, CEO, ThinCats: “More than 60,000 UK businesses impacted by Covid-19 have so far benefited from more than £13 billion of funding through the Coronavirus Business Interruption Loan Scheme. With days running out before the end of September deadline for applications we expect a last minute rush as businesses seek to take advantage of CBILS features such as the government covering the cost of the first 12 months’ interest."

From our experience providing CBILS loans to existing and new borrowers, there are five main areas where businesses applying for loans can help themselves to ensure a smoother application and funding process and avoid inadvertently missing the deadline:

1. Start as soon as possible and use a corporate finance adviser as they will be able to identify the right type of lender for your needs and can help manage the application process

2. Check your business meets the British Business Bank eligibility rules for CBILS and also check your potential lender’s key lending criteria as there may be limits on loan size, sector, profitability, leverage ratios and type of security

3. Check the lender’s key information requirements and provide this information at the point of application as lenders may need this to demonstrate to the British Business Bank that they started the application process before 11.59pm on 30 September

4. Don’t leave it until the last minute as corporate finance advisers and lenders will be dealing with much higher volumes than normal

5. Prepare a flexible financial model as lenders will need to see that a business can cover the cost of servicing its debt and has considered different scenarios such as the impact if more severe social distancing restrictions were reintroduced due to Covid-19

Attia added: "CBILS loans are providing valuable support to SMEs impacted by Covid-19 and we hope that by sharing these tips, businesses can secure the funding they seek while the extra benefits that CBILS offer are still available.”

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