BBLS Vs CBILS: Which One is Right for Me?
In recent months, the government has had to make tough decisions as a result of the COVID-19 crisis. Businesses have needed far more support than usual, which has meant COVID support schemes have been introduced to help them continue running as smoothly as possible. Now, more than ever, businesses need access to quick solutions to support cash flow, in order to secure and keep their heads above water. The two government loan scheme we will be discussing, are the Bounce Back Loan Scheme (BBLS) and the Coronavirus Business Interruption Loan Scheme (CBILS). Both schemes were introduced by the Chancellor of the Exchequer, Rishi Sunak. But, which of these schemes are right for you and how will they help keep cash flow and your business finances stable throughout lockdown?
BBLS
The BBLS (Bounce Back Loan Scheme), was introduced on 27th April 2020. It is specifically intended for start-up SMEs in the early stages of business who may be experiencing a loss of revenues due to the COVID-19 crisis. The BBLS is aimed at micro businesses and provide between £2,000 and £50,000 of debt finance, which doesn’t have to be paid for the first 12 months. To be eligible for this loan, you do not need to have any specific turn around criteria. It is aimed at newer businesses that may not have been running for very long.
CBILS
Already helping thousands of small businesses, the Coronavirus Business Interruption Loan Scheme (CBILS) was introduced with the purpose of helping SMEs in the UK who saw a detrimental impact on their cash flow due to the pandemic. These loans can be anywhere between £50,000 and £5 million to support you through the outbreak. You will need to have a business turnover of under 45 million. CBILS is great if the current climate has disrupted your usual workflow and can also be used to aid business growth, despite the situation we find ourselves in today. With CBILS, the first year of charges are free. More than 70,000 UK businesses have been approved, with £14 billion in CBILS funding.
44 accredited lenders are currently lending under the CBILS scheme. Funding Bay work with a panel of these lenders including, Nucleus, Iwoca, Bibby, Ultimate Finance and Funding Circle, and our team of experts work to ensure that the right lender is matched with the right business. Funding Bay has so far helped raise over £25 million for businesses. Get in contact with a member of our team here.
BBLS vs CBILS
Looking at the two schemes side by side, there are key differences which must be considered.
Aside from the total value, one of the biggest differences is the application process. Whereas CBILS requires businesses to provide a full suite of financial data (management accounts, business plan, historic accounts, details of business assets) to support their borrowing proposal, BBLS can be accessed on a self-certification basis simply by completing a questionnaire, with no requirement to provide much financial data. What this means is that businesses can use BBLS to quickly access finance in a matter of days. However, the variety of finance options for CBILS is more diverse, including term loans, overdrafts, invoice finance and asset finance.
