Only two out of ten CBILS have been approved so far | moneyfacts.co.uk

Michelle Monck

Michelle Monck

Consumer Finance Expert
Published: 16/04/2020

The Coronavirus Business Interruption Loans Scheme (CBILS) reached £1.1 billion in loans this week. The scheme announced by Rishi Sunak four weeks ago pledged £330 billion of Government backed loans for businesses struggling due to the Coronavirus pandemic.

The results published by UK Finance showed that 28,461 applications had been received and of these, 6,016 had been approved. It also stated that “others are still being processed and are expected to be approved over the coming days”. This means the current approval rate is 21% although this could rise as lenders catch up on the backlog of CBILS applications. If the scheme is to perform in line with usual business lending approval rates, then this should rise significantly. UK Finance has previously reported approval rates of 80% for SME lending (UK Finance Q2 2018 report for SME lending).

Demand for CBILS is set to rise in the coming weeks and months and could be as high as 1.1 million applications. The British Chambers of Commerce found that of the businesses it polled 59% have less than three months of reserves and 19% expect to call upon the CBILS. With 5.8 million small businesses in the UK that could equate to over a million CBILS applications.
We have written previously about how CBILS works and have provided an application checklist in our news article how to apply for a Coronavirus Business Interruption Loans.

Which lenders are accepting loans under the Coronavirus Business Interruption Scheme?

Moneyfacts.co.uk has reviewed each of the lenders offering CBILS as shown on the website of The British Business Bank. There are 32 lenders offering loans under CBILS, another six lenders are included but have either closed to applications - are not active or their status is unclear.
Our review of the 32 active lenders shows that 14 of these are regional lenders, with the majority often social enterprises whose remit is to support business start-ups and business regeneration in specific towns or regions. These lenders have regional restrictions that businesses need to be aware of before they apply.

There are 12 lenders that only accept existing customers for CBILS, including six high street banks: Bank of Scotland, Clydesdale and Yorkshire Bank Group, HSBC, Lloyds Bank, Metro Bank and Santander. The only high street banks operating nationally that accept all customers are Barclays, NatWest and RBS.

Lenders offering business loans under CBILS

The table shows which lenders accept CBILS applications from all customers, only existing customers, if they lend nationally or only regionally and if there are a high street bank.

Provider Existing customers only? All customers can apply? Regional lending only? National Lending? High Street Bank?
Aldermore No Yes No Yes No
Arkle Finance Limited Yes No No Yes No
Art Business Loans Yes No No Yes No
Askif Inclusive Finance No Yes No Yes No
Bank of Ireland UK No Yes No Yes No
Bank of Scotland Yes No No Yes Yes
Barclays No Yes No Yes Yes
BCRS Business Loans No Yes Yes No No
Business Enterprise Fund No Yes Yes No No
Clydesdale and Yorkshire Banking Group Yes No No Yes Yes
Coutts Yes No No Yes No
Coventry & Warkwickshire Reinvestment Trust No Yes Yes No No
DSL Finance No Yes Yes No No
Enterprise Answers No Yes Yes No No
Finance for Enterprise No Yes Yes No No
First Enterprise No Yes Yes No No
GC Business Finance No Yes Yes No No
Hitachi Capital Plc Yes No No Yes No
HSBC Yes No No Yes Yes
Let's Do Business Group No Yes Yes No No
Lloyds Bank Yes No No Yes Yes
MSIF No Yes Yes No No
Metro Bank Yes No No Yes Yes
NatWest No Yes No Yes Yes
OakNorth Bank Yes No No Yes No
Robert Owen Community Banking No Yes Yes No No
Santander Yes No No Yes Yes
Secure Trust Bank Yes No No Yes No
SWIG No Yes Yes No No
RBS No Yes No Yes Yes
UKSE No Yes Yes No No
Ulster Bank No Yes Yes  No Yes

The table above does not include those six lenders whose status in CBILS is either not active, not yet ready or unclear. 

There are new lenders joining the scheme and this includes the Co-operative Bank and Starling Bank, the latter of which is new to any type of business lending. It is not known when they will start to accept Coronavirus Business Interruption Loan applications.
Those businesses wanting a loan under CBILS may find these restrictions limit their choice of lenders and researching each one to see if they will accept an application is potentially a confusing and time-consuming task. This is before even providing the evidence needed for an application and the checks required to be approved for a loan.
There are brokers who specialise in business lending that are helping businesses to find a lender that will accept them for a loan under the CBILS scheme.

Why are businesses struggling to get Coronavirus Business Interruption Loans Scheme?

Our research found the potential for some businesses to be left with a choice of only three lenders under CBILS. For example:
There are 32 active lenders, of which 12 restrict CBILS to existing customers only. If the business is not a customer of those, this leaves 20 active lenders. There are 14 regional lenders, so if the business is not in one of these areas, this leaves seven active lenders. There are three high street lenders then available, if the business does not meet their credit requirements, then the business will have a choice of three lenders remaining. These would be Aldermore, Askif Inclusive Finance (only offer loans of £10,000 to £60,000) and Bank of Ireland.
Moneyfacts lists 25 alternative business lenders, none of which currently participate in CBILS. These lenders could bring much needed diversity to the scheme, by potentially accepting those businesses that are not existing customers of other lenders or that do not meet their minimum requirements for credit.
The use of personal guarantees is commonplace in business lending, as many lenders use this make sure that if a loan defaults they can recover their losses. CBILS does not allow personal guarantees on loans below £250,000 and for loans greater than this there is a cap of 20% that can be recovered from personal assets. Some lenders may be concerned that their own operation is at risk if they accept these terms and/or the actual number of businesses they could accept without these guarantees would be severely limited.
This is part of the reason some people are now calling for the Government backing on CBILS to increase from 80%, in the hope more lenders will join, and those already on the scheme will increase their approval rate and open up to new customers.
Those businesses that can progress a CIBLS application and are approved may also find that they are instead offered a standard loan on the regular commercial terms of the lender. Lenders can do this if they feel the business does not need to make use of the Coronavirus Business Interruption Loan Scheme.
Find out more about how the Coronavirus Business Interruption Scheme works and how to apply for a Coronavirus business loan.

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