Loans for small businesses affected by coronavirus

The government is temporarily replacing the Enterprise Finance Guarantee (EFG) scheme, provided through the British Business Bank, with a Coronavirus Business Interruption Loan Scheme.

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With cancelled events, few customers and supply chain disruptions, small businesses are taking a hit during the coronavirus outbreak. But you have better access to credit than you thought from both the government and some private lenders.

The UK government has created two loan schemes to help affected businesses: the Bounce Back Loan Scheme (BBLS) and Coronavirus Business Interruption Loan Scheme (CBILS).

From 1 April, UK businesses began receiving £22bn in support in the fform of business rates relief and grants up to £25,000. The government has also urged the major UK banks to make sure the benefits of its loan schemes reach businesses and consumers, and that no businesses are unfairly refused funds.

Coronavirus Bounce Back Loans (BBLS)

On 27 April, the UK government announced a new loan scheme for small businesses affected by the coronavirus pandemic, designed to offer quick and easy finance. Under the Bounce Back loan scheme, businesses can apply for a loan of up to £50,000, or 25% of turnover. The government will guarantee 100% of the loan amount, and pay the interest on the loan for the first 12 months.

Eligible businesses will be offered loan terms up to six years, and all loans will be provided with a fixed 2.5% p.a. interest rate. Business owners will also not need to provide security or a personal guarantee on the loan.

Bounce Back loans were made available on 4 May, and businesses should receive the funds within 24 hours of approval.

Bounce Back Loan Scheme (BBLS) features

  • Loans from £2,000 to £50,000
  • Loan terms up to six years
  • Loan amount up to 25% of business’ turnover
  • Fixed 2.5% p.a. interest rate
  • Government guarantees 100% of loan amount
  • Can make early repayments without paying fees
  • No personal guarantee or security required
  • Interest payments covered by government for first 12 months

Is my business eligible for BBLS?

To be eligible for the Bounce Back loan scheme, your business will need to meet the following requirements:

  • Has been adversely affected by the coronavirus pandemic
  • Was not considered a “business in difficulty” as of 31 December 2019
  • Is engaged in commercial activity or trading in the UK
  • Was established before 1 March 2020
  • Is not already using CBILS or other government covid-related finance facility
  • Is not in liquidation, bankruptcy or undertaking debt restructuring at the time of application
  • Earns more than 50% of its revenue from trading activity

The following types of businesses are unable to apply for a BBLS loan:

  • Credit institutions
  • Public sector organisations
  • Insurance companies
  • State-funded primary and secondary schools

How do I apply for the BBLS?

To apply for a business loan under the BBLS scheme, you will need to approach one of the accredited lenders listed below, and then approach them directly. You’ll then need to complete the lender’s application form, and your business will be subject to regular customer fraud, Anti-Money Laundering (AML) and Know Your Customer (KYC) checks.

Which lenders are accredited under the BBLS?

How much has been lent so far under the Bounce Back Loan scheme?

To date there has been almost £20 billion borrowed from accredited lenders in the government’s Bounce Back Loan scheme with more being leant each week. That amount accounts for almost 650,000 individual loans to businesses in the UK.

Date Number of Facilities Approved Value of Facilities Approved
2 August 1,135,575 £34.34bn
26 July 1,113,312 £33.68bn
19 July 1,084,153 £32.79bn
12 July 1,047,611 £31.70bn
5 July 1,013,410 £30.93bn
28 June 967,321 £29.51bn
21 June 921,229 £28.09bn
14 June 863,584 £26.34bn
7 June 782,246 £23.78bn
31 May 699,354 £21.29bn
24 May 608,069 £18.49bn
17 May 464,393 £14.18bn
10 May 268,173 £8.38bn

Coronavirus Business Interruption Loan Scheme (CBILS)

The Coronavirus Business Interruption Loan Scheme is a UK government initiative that has temporarily replaced the existing Enterprise Finance Guarantee (EFG). It allows smaller businesses to borrow up to £5 million, or up to £25 million for larger businesses, with the government covering all interest payments and fees for the first 12 months.

CBILS loans are only offered by business lenders that have been accredited under the scheme, and businesses will need to apply with a lender directly in order to get a loan.

Coronavirus business loan (CBILS) features

  • Loans up to £5 million for smaller businesses
  • Loans up to £25 million for businesses with turnover between £45 million and £500 million
  • Government guarantees 80% of loan amount
  • No personal guarantees required for loans under £250,000
  • Interest and loan fees covered by government for initial 12 months

What types of loans does CBILS support?

Different lenders may not necessarily offer all business finance options listed above, and your business will remain 100% liable for the debt.

Is my business eligible for CBILS?

Your business will need to meet the following criteria to be eligible for support via the Coronavirus Business Interruption Loan Scheme (or EFG):

  • Be based in the UK
  • Have yearly turnover of no more than £45 million
  • Has a legitimate borrowing plan that would normally be considered viable by a lender
  • Can self-certify that your business has been adversely affected by the coronavirus pandemic

The following types of businesses are ineligible for a CBILS loan:

  • Banks, insurers and reinsurers
  • Public-sector bodies
  • Grant-funded further education institutions
  • State-funded schools

How do I apply for CBILS?

While the scheme is backed by the UK government, the loans themselves are provided by a panel of leading commercial business lenders. To apply for a loan under the CBILS scheme, you will need to contact one of the accredited lenders listed below. These lenders vary in size from some of the more high street names (such as Hitachi Finance, Santander and HSBC) to smaller outfits that have gained government accreditation.

Secure Trust Bank

Secure Trust Bank

The FSE Group

The FSE Group

Handelsbanken

Handelsbanken

CWRT

CWRT

Shire Leasing

Shire Leasing

Tridos Bank UK

Tridos Bank UK

UKSE

UKSE

Bank of India

Bank of India

Triple Point

Triple Point

Newable

Newable

Arbuthnot Commercial ABL

Arbuthnot Commercial ABL

JCB Finance

JCB Finance

Calverton Finance

Calverton Finance

Leumi

Leumi

Ebury

Ebury

Scaniaa Financial Services

Scaniaa Financial Services

4Syte

4Syte

Previse

Previse

Growth Lending

Growth Lending

Fiduciam

Fiduciam

Woodsford TradeBridge

Woodsford TradeBridge

Silicon Valley Bank

Silicon Valley Bank

Business Enterprise Fund

Business Enterprise Fund

LendingCrowd

LendingCrowd

Paragon Bank

Paragon Bank

ask if

ask if

ART Business Loans

ART Business Loans

Close Brothers

Close Brothers

NEL Fund Managers

NEL Fund Managers

MSIF

MSIF

Chamber Acorn

Chamber Acorn

FOLK2FOLK

FOLK2FOLK

Atom bank

Atom bank

Maxxia

Maxxia

Asset Finance Partners

Asset Finance Partners

Social Investment Business

Social Investment Business

ABN-AMRO Commercial Finance

ABN-AMRO Commercial Finance

1pm

1pm

FW Capital

FW Capital

Haydock Finance

Haydock Finance

Whiterock Finance

Whiterock Finance

Sonovate

Sonovate

Tower Leasing

Tower Leasing

Mercia Asset Management

Mercia Asset Management

ThinCats

ThinCats

United Trust Bank

United Trust Bank

Maven Capital Partners

Maven Capital Partners

Secure Trust Bank

Secure Trust Bank

Arbuthnot Commercial ABL

Arbuthnot Commercial ABL

Calverton Finance

Calverton Finance

Leumi

Leumi

4Syte

4Syte

Growth Lending

Growth Lending

Woodsford TradeBridge

Woodsford TradeBridge

Close Brothers

Close Brothers

ABN-AMRO Commercial Finance

ABN-AMRO Commercial Finance

Sonovate

Sonovate

Shire Leasing

Shire Leasing

JCB Finance

JCB Finance

Scaniaa Financial Services

Scaniaa Financial Services

Paragon Bank

Paragon Bank

Maxxia

Maxxia

Asset Finance Partners

Asset Finance Partners

ABN-AMRO Commercial Finance

ABN-AMRO Commercial Finance

1pm

1pm

Haydock Finance

Haydock Finance

Tower Leasing

Tower Leasing

United Trust Bank

United Trust Bank

Secure Trust Bank

Secure Trust Bank

The FSE Group

The FSE Group

Handelsbanken

Handelsbanken

CWRT

CWRT

Shire Leasing

Shire Leasing

Tridos Bank UK

Tridos Bank UK

UKSE

UKSE

Bank of India

Bank of India

Triple Point

Triple Point

Newable

Newable

JCB Finance

JCB Finance

Calverton Finance

Calverton Finance

Leumi

Leumi

Previse

Previse

Growth Lending

Growth Lending

Fiduciam

Fiduciam

Woodsford TradeBridge

Woodsford TradeBridge

Silicon Valley Bank

Silicon Valley Bank

Business Enterprise Fund

Business Enterprise Fund

LendingCrowd

LendingCrowd

Paragon Bank

Paragon Bank

ask if

ask if

ART Business Loans

ART Business Loans

NEL Fund Managers

NEL Fund Managers

MSIF

MSIF

Chamber Acorn

Chamber Acorn

FOLK2FOLK

FOLK2FOLK

Atom bank

Atom bank

Maxxia

Maxxia

Asset Finance Partners

Asset Finance Partners

Social Investment Business

Social Investment Business

ABN-AMRO Commercial Finance

ABN-AMRO Commercial Finance

1pm

1pm

FW Capital

FW Capital

Whiterock Finance

Whiterock Finance

Tower Leasing

Tower Leasing

Mercia Asset Management

Mercia Asset Management

ThinCats

ThinCats

United Trust Bank

United Trust Bank

Maven Capital Partners

Maven Capital Partners

Lending under CBILS to date

Lending under the Coronavirus Business Interruption Scheme has now passed £8 billion according to data released on 24th May.

With over 43,000 loans now approved within the scheme, the average amount lent is almost £190,000.

Lenders have also stepped up the approval rate of the loans. As recently as 14th April, only 21% of loans applied for were being approved. As of 24th May, loan approval rate has soared past 1 in 2 with 54% of loan applications being approved.

Date Number of loans approved Value of loans approved in £ billion
2-August 58,595 £13.08
26-July 57,234 £12.65
19-July 55,674 £12.20
12-July 54,538 £11.85
5-July 53,536 £11.49
28-June 52,275 £11.07
21-June 50,482 £10.53
14-June 49,247 £10.11
7-June 47,650 £9.56
31-May 45,843 £8.92
24-May 43,045 £8.15
17-May 40,564 £7.25
10-May 35,919 £6.09
06-May 33,812 £5.548
05-May 32,734 £5.310
04-May 31,539 £5.083
01-May 29,496 £4.746
30-Apr 27,322 £4.436
29-Apr 25,262 £4.158
28-Apr 23,548 £3.890
27-Apr 22,091 £3.647
24-Apr 20,284 £3.379
23-Apr 18,595 £3.123
22-Apr 16,624 £2.825
21-Apr 14,779 £2.538
20-Apr 13,005 £2.228
17-Apr 10,473 £1.907
16-Apr 8,780 £1.594
15-Apr 7,609 £1.376
14-Apr 6,053 £1.116
09-Apr 4,222 £0.811
08-Apr 3,313 £0.613
07-Apr 2,576 £0.453
06-Apr 2,022 £0.292
03-Apr 1,487 £0.195
02-Apr 1,250 £0.146

Coronavirus Large Business Interruption Loan Scheme (CLBILS)

The Coronavirus Large Business Interruption Loan Scheme is an additional government scheme aimed at mid-cap and larger businesses with at least £45m in turnover. As part of CLBILS, UK businesses can borrow up to £200m, with a maximum of 25% of the company’s 2019 turnover, or double its total annual wage bill.

The borrowing business will remain 100% responsible for paying back the loan, and the maximum repayment term is 3 years. There are also certain restrictions placed on businesses looking to seek finance under CLBILS, which includes halting dividend payments, cash bonuses and new pay rises to senior management until the loan has been repaid in full.

Government business loans and grants

The UK government will provide at least £330bn in state-backed loans to people and business affected by coronavirus. Cash grants up to £25,000 will be provided for businesses in the retail, leisure and hospitality industry, and small businesses in other industries will be eligible to apply for grants of £10,000.

This will be alongside another £20bn in other measures such as tax breaks to help support companies and families. Business rates will also be scrapped for all retail, leisure and hospitality companies this year.

COVID-19 Corporate Financing Facility

Large businesses affected by the coronavirus pandemic can also apply for the Bank of England to buy their short-term debt so that they can finance their short-term liabilities.

The scheme is designed to operate for at least 12 months, and is delivered by commercial business lenders and backed by the Bank of England. In order to be eligible, businesses will need to make a material contribution to the UK economy.

Small Business Grants Fund

The UK government is offering grants for small businesses with a property that is eligible for Small Business Rates Relief (SBRR), including tapered relief and rural rates relief. Eligible businesses can claim a grant up to £10,000, but cannot claim for a property that is occupied for personal use, car parks, or if their business was in liquidation or dissolved by 11 March.

Retail, Hospitality and Leisure Grant Fund

Retail, leisure and hospitality businesses can also claim rates grants of £10,000 and £25,000 provided they have an eligible property or properties covered under the expanded retail discount.

Businesses that were eligible as of 11 March must have a property with a rateable value of less than £51,000. Properties with a rateable value up £15,000 can receive a £10,000 grant, and properties with a value between £15,000 and £51,000 are eligible for a £25,000 grant.

Coronavirus Job Retention Scheme

As part of its measures to protect businesses in the wake of the coronavirus pandemic, the UK government has also announced a job retention scheme to help businesses cover the wages of furloughed employees.

The scheme was initially designed to last for three months, starting from 1 March, to cover 80% of staff wages, up to a maximum of £2,500 per month. On 11 May, the government extended the scheme until the end of October.

You can now apply for the Coronavirus Job Retention Scheme through the government portal.

Eligibility requirements

To be eligible for the Coronavirus job retention scheme, your business must have:

  • A PAYE payroll scheme that was started before 28 February 2020
  • Enrolled for PAYE online
  • A UK bank account

What are my other business finance options?

If your business is ineligible for finance through the government scheme, but still needs a loan, there are alternatives. The government-backed Start Up Loans offers business finance up to £25,000 for partners of new or emerging businesses.

You could also consider the following business lenders:

Name Product Loan type Loan amounts Loan terms Turnover/trading criteria
Esme Business Loan
Fixed rate unsecured loan
£10,000 to £250,000
1 year to 5 years
£50,000 minimum turnover,
minimum 3 years trading
Representative example: Borrow £50,000 over 24 months at a rate of 8.40% p.a. (fixed). Representative APR 8.73% and total payable £54,491.93 in monthly repayments of £2,270.5.
Fleximize Unsecured Business Loan
Fixed rate unsecured loan
£5,000 to £250,000
1 month to 2 years
£60,000 minimum turnover,
minimum 6 months trading
Representative example for loans of £25,000 or below: Borrow £12,500 over 15 months with an interest rate of 36.4% p.a. (fixed). Representative APR 43.1% and total payable £15,740.33 in monthly repayments of £1,049.36.
MarketFinance Small Business Loan
Fixed rate unsecured peer-to-peer loan
£5,000 to £250,000
6 months to 3 years
£50,000 minimum turnover,
minimum 2 years trading
Nucleus Cash Flow Finance
Fixed rate unsecured loan
£25,000 to £150,000
3 months to 5 years
No specified minimum turnover,
minimum 3 years trading
Spotcap Short Term Loan
Fixed rate unsecured loan
£50,000 to £350,000
1 month to 24 months
£500,000 minimum turnover,
minimum 3 years trading
Representative example: Borrow £100,000 over 12 months with an average monthly interest rate of 1.4% and a 2.0% arrangement fee. Representative APR 22.8% and total payable £109,332 in monthly repayments of £9,111.
Capital Box Loan
Fixed rate unsecured loan
£2,000 to £50,000
18 months
£75,000 minimum turnover,
minimum 12 months trading
Growth Street GrowthLine
Fixed rate secured peer-to-peer line of credit
£25,000 to £1,000,000
From 1 day and open-ended
£250,000 minimum turnover,
minimum 15 months trading
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Business loans in lockdown and beyond

Finder published a paper in June 2020 looking at how financial support for SMEs is unfolding through the CBILS and BBLS programmes, and how the business loans landscape is evolving. Our paper includes original research into consumer spending intentions, as well as contributions and expert predictions from Katrin Herrling, CEO of Funding Xchange, Sharif Mohamed, head of business development – partnerships, at iwoca, Alex Miles, head of growth at Capital on Tap, and Mike Cherry, national chairman of the Federation of Small Businesses.

Download your free copyAll the content may be republished with a link to this page
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