This British Business Bank-backed scheme is designed to support UK based small and medium-sized businesses that have a turnover of more than £45m and that can demonstrate they were viable before the COVID-19 pandemic. Click here if your business has a turnover of less than £45m.
Further information can also be found on the British Business Bank website.
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. Visit british-business-bank.co.uk
Key Features
Loan size
You can apply for a loan with OakNorth Bank from £500,000 to £50m.
Term loans over £50m (up to a maximum of £200m) are available with other CLBILS lenders who have secured additional accreditation. Companies borrowing more than £50m through CLBILS will be subject to further restrictions on dividend payments, senior pay and share buybacks during the period of the loan. Full details can be found here.
Flexible terms available
Spread repayments of your loan from three months to three years
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 a UK based business with a group turnover of more than £45m per year
- Have a borrowing proposal which, were it not for the COVID-19 pandemic, would be considered viable and for which the provision of finance will enable trading out of any short-to-medium term difficulty
- Have not received a loan under the Bank of England’s COVID Corporate Financing Facility (CCFF), CBILS or BBLS.
Other details:
- CLBILS 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, not just the 20% that falls outside of the coverage of the government’s guarantee.
- 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 CLBILS loan applications is £500,000 which is in line with the loan size we do with our normal commercial loans.
- Lender and Borrower are still free to enter into loan agreements outside of CLBILS e.g. where there is no economic benefit to the borrower of taking out a CLBILS loan over normal commercial lending.
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 CLBILS 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:
- Credit institutions (falling within the remit of the Bank Recovery and Resolution Directive);
- Building societies, 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.
Why isn’t OakNorth Bank offering loans of more than £50m?
We are only accredited for loans up to £50m.
Term loans over £50m (up to a maximum of £200m) are available with other CLBILS lenders who have secured additional accreditation. Companies borrowing more than £50m through CLBILS will be subject to further restrictions on dividend payments, senior pay and share buybacks during the period of the loan. Full details can be found here.
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 £500,000 up to £50m, a personal guarantee may be requested. However, claims on personal guarantees cannot exceed 20% of losses after all other recoveries have been applied.
Can I refinance a loan into CLBILS?
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?
The interest rate on your loan will be agreed with you and communicated to you at the outset.
What do I do if my CLBILS application is unsuccessful?
There are several government support measures for businesses 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).