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OakNorth Bank is committed to supporting businesses as they work through the financial challenges posed by the COVID-19 pandemic.

This British Business Bank-backed scheme is designed to support UK based small and medium-sized businesses that have a turnover of up to £45m and that can demonstrate they were viable before the COVID-19 pandemic.

Further information can also be found on the British Business Bank website.

British Business Bank logo

Managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy & Industrial Strategy. British Business Bank plc is a development bank wholly owned by HM Government. It is not authorised or regulated by the PRA or the FCA.

Key Features

Loan size
You can apply for a loan with OakNorth Bank from £500,000 to £5m

Type of loan
OakNorth Bank offers term loans. If you require an overdraft, invoice finance or asset finance, please apply for this with another accredited lender on the scheme (full list here).

Flexible terms available
Spread repayments of your loan over up to 6 years

Interest free period
The Government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees (including arrangement fees or early repayment charges), so smaller businesses will benefit from no upfront costs and lower initial repayments.

Limited time to apply
This scheme currently runs to 31 January 2021.

Eligibility Criteria:

The eligibility criteria specified by the British Business Bank states that this scheme is open to businesses that:

  • Are UK based with turnover of no more than £45m per year.
  • Have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender.
  • Can self-certify that it has been impacted by the Coronavirus.

Other details:

  • CBILS offers the lender a government-backed (80%) guarantee against the outstanding balance of the facility.
  • As a business you will be responsible for repayment of 100% of the facility. The guarantee is to the lender, not the borrower.
  • Security will be requested, and a personal guarantee may be requested. No personal guarantees are permitted for facilities under £250,000. For facilities of £250,000 and over, claims on personal guarantees cannot exceed 20% of losses after all other recoveries have been applied.
  • Please note that individual lenders may also have their own additional criteria for eligibility. At OakNorth Bank, the minimum sum we accept for CBILS loan applications is £500,000 which is in line with the loan size we do with our normal commercial loans.

The British Business Bank has created a range of tools for SMEs to help them understand the scheme, including an SME FAQs page which is regularly reviewed and updated, and has a wide range of in-depth information about the scheme.

FAQs that are specifically relevant to OakNorth Bank’s CBILS participation can be found below.

What happens if I default?

Where defaults occur, we follow our standard commercial recovery procedures, including the realisation of security, before we make a claim against the government’s 80% guarantee.

Are all sectors eligible?

There are some sectors that are not eligible:

  • Banks, Insurers and Reinsurers (but not insurance brokers);
  • Public sector bodies and;
  • State funded primary and secondary schools.

Why isn’t OakNorth Bank offering asset finance, invoice finance, or overdrafts?

We have never offered asset finance, invoice finance, or overdrafts. Instead, we have focused on offering term loans which start at £500,000. In order to best support businesses through this challenging period and ensure we’re able to conduct the correct level of credit analysis, we are focusing on the loan size we do with normal commercial loans – which typically doesn’t fall below £500,000.

My business was under pressure before the COVID-19 crisis – am I still eligible for CBILS?

You can still be considered for a loan under the scheme, though these are subject to business viability and you must meet the full eligibility criteria to be approved.

What security do I need to provide?

A debenture giving legal charge over all the assets in the business.

Does a personal guarantee need to be provided?

As we provide loans of a minimum of £500,000, a personal guarantee may be requested. However, claims on personal guarantees cannot exceed 20% of losses after all other recoveries have been applied.

Additionally, a borrowers/guarantors’ Principal Private Residence (PPR) cannot be taken as security to support a Personal Guarantee or as security for a CBILS- backed facility.

Can I refinance a loan into CBILS?

Possibly – under very specific circumstances. Please get in touch with our team so we can discuss it directly with you.

What kind of interest rates will businesses need to pay?

If your business is eligible for a ‘Business Interruption Payment’, then the UK Government will cover the first 12 months’ interest applicable to your loan together with certain fees, including the arrangement fee and early repayment charges. The ‘Business Interruption Payment’ is provided by the UK Government to support eligible customers to help businesses manage in these challenging circumstances. After the initial 12 months, the interest rate on your loan that has been agreed and communicated to you at the outset will start to apply.

What do I do if my CBILS application is unsuccessful?

There are several government support measures for businesses such as grants which you may be eligible for. Further information on these initiatives is available on gov.uk.

You may also be able to get a loan from another accredited lender on the scheme (full list here) or from a non-bank lender. You can compare options here.

Application Form

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