Asset finance with the Coronavirus Business Interruption Loan Scheme (CBILS)

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Asset finance with the Coronavirus Business Interruption Loan Scheme (CBILS)

The current situation has left many businesses with financial uncertainty and the need to examine what is might bring the company back to past success. With furloughed staff and, often, a huge loss of custom, clients and income it is easy to dwell on the negatives.

But, if you are looking for a new direction for your business or to improve on your current standing, there are many positives to find in the aftermath of the lockdown. Now is a great time to embrace the need for change and put plans in action for the future, especially when it comes to business assets. Both the government and asset-based lenders are supportive in helping businesses get back on track with asset finance and refinance.

There are great deals available on machinery refinance, for example, allowing you to acquire the machinery and equipment you need to move forward, often in a manner more preferential than before. The finance industries require the success of other sectors to succeed and this is reflected in current offerings.

We at Asset Finance Arena find that the market for machinery finance and refinance options has opened up as the government tries to kick start the economy after lockdown. This is true of most areas of finance and our expert advisers are helping many businesses find the funding they need.

For things like machinery, through accredited lenders, we have access to the Coronavirus Business Interruption Loan Scheme (CBILS) which is available to provide up to £5million as asset finance. Through the scheme, the government provides a guarantee on the loan repayments, which is encouraging more lending. While the borrower remains fully liable for the debt, this guarantee is offering lenders confidence in lending to businesses.

Some key features of the Coronavirus Business Interruption Loan Scheme (CBILS)

  • Up to £5million in finance
    This amount is available on repayment terms of up to six years.
  • Government-backed, partial guarantee against the outstanding balance of the finance.

  • Interest and fees paid by the government for 12 months

  • Favourable security terms
    Whilst in the past insufficient security was a condition to access the scheme, this is no longer the case. CBILS can support smaller businesses by lending even where they consider there to be insufficient security.

    For facilities under £250,000 no personal guarantee is required, but may still be required at amounts over that figure at the lender's discretion. This excludes the Principal Private Resident (PPR) and recoveries are capped at a maximum of 20% of the outstanding balance.
  • Small businesses pay no guarantee fees
Alongside the other government-led small business support options like the Future Fund and Bounce Back loan, the CBILS along with favourable financial market conditions means that there is the financial support and options available to not only help your business survive but also thrive.

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