The UK Government announced wide-sweeping measures including an assistive financial package of at least £330 billion to help businesses cope during the Coronavirus crisis period

The CBILS is available through participating, accredited lenders, which include Barclays, Santander, Secure Trust and Lloyds. A full list of accredited is on the British Business Bank website.

Businesses are being advised to contact their own lender in the first instance.

CBILS supports a wide range of business finance products, including term loans, overdrafts, invoice finance and asset finance.

To be eligible for a facility under CBILS, an SME must:

• be UK-based in its business activity, with annual turnover of no more than £45m

• Have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable the business to trade out of any short-to-medium term difficulty.

•There is no guarantee fee for SMEs to access the scheme 

• Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees

• Fishery, aquaculture and agriculture businesses may not qualify for the full interest and fee payment

• We understand that some lenders indicated that they would not charge arrangement fees or early repayment charges to borrowers under the scheme

• Maximum value of a facility provided under CBILS will be £5million

• Repayment terms are up to six years for term loans and asset finance facilities; and for overdrafts and invoice finance facilities, up to three year

• Security - at the discretion of the lender, CBILS may be used for unsecured lending for facilities of £250,000 and under. For facilities above £250,000, the lender must establish a lack or absence of security prior to businesses using CBILS. Primary Residential Property (PPR) cannot be taken as security under the scheme. If the lender can offer finance on normal commercial terms without the need to make use of the scheme, they will do so.

• The borrower always remains 100% liable for the debt

• Bank of England with the assistance of banks (who will issue the eligible CP to the CCFF).

• The scheme will be funded by central bank reserves (in line with other Bank of England market operations).

The CCFF will purchase sterling-denominated CP with the following characteristics:

• maturity of one week to twelve months;
• where available, a credit rating of A-3/P-3/F-3 from at least one of Standard & Poor’s, Moody’s and Fitch as at 1 March 2020. If firms have different ratings from different agencies, and one of those is below investment grade then the CP will not be eligible; and
• issued directly into Euroclear and/or Clearstream.

At least 12 months

• Firms that:

• can demonstrate they were in sound financial health prior to the start of the Coronavirus crisis, i.e. if they had a short or long-term rating of investment grade, as at 1 March 2020, or equivalent

• make a material contribution to the UK economy. 

In practice, the expectation is that this will mean UK incorporated companies (including those with foreign-incorporated parents) with a genuine business in the UK; companies with significant employment in the UK; and companies with their headquarters in the UK. We understand that the BoE will also consider whether the company generates significant revenues in the UK, serves a large number of customers in the UK or has a number of operating sites in the UK.

• There is no requirement for an applicant to have issued CP prior to using the CCFF

CP will the following features will not be eligible for purchase by the BoE under the CCFF:

• CP with non-standard features, for example extendibility or subordination; 

• CP issued by issued by banks, building societies, insurance companies and other financial sector entities regulated by the Bank of England or the Financial Conduct Authority will not be eligible; and

• CP issued by leveraged investment vehicles or from companies within groups which are predominantly active in businesses subject to financial sector regulation.

• The minimum size of an individual security that the CCFF will purchase from an individual participant is £1 million nominal and all offers need to be rounded to the closest £0.1 million.

• General terms of the financing will be comparable to those prevailing in markets in the period before the Coronavirus crisis.

• All companies that participate in the CCFF will be asked to sign a confidentiality agreement with the BoE.

• The names of issuers and securities purchased or eligible will not be made public.

• Each Thursday at 15:00 the BoE will publish (in aggregate): (i) the total amount of CP purchased that week, up until the previous day, in terms of the amount paid to the sellers; and (ii) the total amount of CP that has been purchased to date, minus the amount of CP that has matured.