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CBILS update: evidence requirements relaxed

29 April 2020: the UK’s seven largest small business lenders have relaxed evidence requirements for applications to the existing Coronavirus Business Interruption Loan Scheme.

Following the creation of the government’s new Bounce Back Loans scheme (BBLS), further changes to the Coronavirus Business Interruption Loan Scheme (CBILS) have also been announced. 

To speed up the provision of finance to small and medium-sized businesses under CBILS, the largest seven SME lenders (Barclays Bank UK, Danske Bank, HSBC, Lloyds Bank, NatWest, Santander and Virgin Money) have stated that rather than relying on businesses providing forecasts and business plans in applications, lenders will use their own information.

A joint statement from the seven largest SME lenders and UK Finance proclaimed: “Following the changes to the scheme announced today lenders will only ask businesses for information and data they might reasonably be able to provide at speed and we will not require the provision of forward-looking financial information or business plans from businesses applying for CBILS-backed lending, relying instead on our own information to assess credit and business viability.”

While the exact details of the changes are still to be released, the moves should make the scheme easier to access and make the application process quicker. However, businesses should still assess carefully the implications of taking on debt finance and be comfortable that this is the right solution for them at this time.

Businesses with existing finance should also consider other options provided by their lender such as capital repayment holidays, overdrafts and working capital extensions where appropriate. Banks have also been encouraged to support businesses who have successfully applied for furlough with their cashflow needs in advance of furlough funds being received.

Commenting on the changes Philippa Kelly, Head of the Financial Services Faculty at ICAEW, said: “We are pleased to see lenders taking the need to provide support quickly seriously, but the process must remain robust, for the benefit of businesses and the wider financial system.” 

ICAEW will publish an update on the details of the scheme changes when they become available.

On Friday 1 May an ICAEW webinar will explore the changes to the schemes and provide other tips on managing cashflow during the crisis.