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CBILS - any feedback on applications so far ?

Have your clients been accepted/rejected?

Didn't find your answer?

The Coranvirus Business Interruption Loan Scheme is now live. Can anyone share anything re clients getting loans or getting rejected for loans so far?

I only have one bit of negative feedback so far. Barclays offered a loan to my client's business but asked for 100% personal guarantees!!!! What is the point in them being 80% government backed if the banks ask for 100% PG's?!

I hope this is a one-off cock-up by Barclays rather than something we are going to see when other clients apply.

 

Replies (15)

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By Cheshire
25th Mar 2020 08:33

I posted about this PG situation on Monday. Indeed the fact that behind a PG they want tangible security. It wasnt Barclays it was NatWest.

I emailed a business manager at NatWest yesterday for a client asking for clarification becuase the NatWest website states ''If you are not eligible to receive finance against our standard lending criteria, we will be able to consider your application under the CBILS scheme''

Ive had an answer this morning advising ''. In situations were the customer has reached their level of unsecured debt that the bank is comfortable with, CBILS could be a viable option. Standard lending criteria must be exhausted first before CBILS can be considered. The purpose of the scheme is not to put cheap money out there, its to support businesses that otherwise wouldn`t be able to obtain bank funding.''

Im lost for words just now!

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By meadowsaw227
25th Mar 2020 08:53

A couple of clients are finding it virtually impossible to get through to Barclays - 4 hour wait and then being "cut off" .

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By jacquinunn
25th Mar 2020 13:50

Me too - 2 hours on hold so far......

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Caroline
By accountantccole
25th Mar 2020 09:01

Only aware of one friend who tried Barclays. He was told to wait until they know what else is available to the self employed

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Replying to accountantccole:
By 0098087
25th Mar 2020 10:46

Yes I checked Barclays and they said if they can't lend on commerical terms then you could go to the new scheme. But I thought the whole point was to get an interest free loan..obviously no one told the banks. Sorry but the government really is behind the curve on this one..

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By Carl London
25th Mar 2020 13:10

From Barclays -

... the 80% Government Guarantee protects the banks not the client hence the need for PGs. In the event of default, those PGs are to be enforced first and then any shortfall is where the Government protects the bank.

Seems to defeat the point...

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By sb3736
25th Mar 2020 13:45

Extracted from the Lloyds Bank CBIL application form:

"Example of how the guarantee works:
A UK business, borrows £100,000 from the Bank as a 6 year loan under the CBIL Scheme.
• Two years later the business fails with £80,000 still owed under this loan.
• The Bank pursues the customer for the outstanding debt of £80,000.
• After all options are explored, £50,000 is claimed by the Bank under personal
guarantees, leaving £30,000 outstanding.
• The Bank then makes a claim under the CBIL Scheme from the UK Government and £24,000 of the £30,000 remaining debt is paid to the Bank (80% of the remaining debt is the maximum which might be paid under the scheme).
• The Bank continues to look for repayment of the £30,000 from the customer. When, subsequently, the customer is able to pay £20,000 the Bank collects this and refunds £16,000 of it (80%) to UK Government – in line with the 80% paid by the Government.
• The customer remains liable for the £10,000 still outstanding. If this were to be repaid it would also be split with the Government in line with the guarantee claim."

So is the customer forever liable, whatever happens? If that's the case, then what is the point of having a government guarantee in the first place?

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By Carl London
26th Mar 2020 07:48

This fiasco has now hit the mainstream press! https://www.bbc.co.uk/news/business-52043896

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By da95649
26th Mar 2020 18:33

I have been trying to get some new information about this fund. I have a borrowing amount which is higher than the £5m max they cover. MY bank have a agreed to a capital repayment holiday for 6 months, but still have to pay the interest. Can I apply for a £5m loan interest free in order to pay some of the interest from my current loan then just pay the interest on the balance? Would this be what the product is designed for?

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Replying to da95649:
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By Cheshire
31st Mar 2020 09:03

Go and ask your banking relationship manager

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Maddy Christopher
By Maddy Christopher
31st Mar 2020 11:33

Hi Carl London,

I've contact Barclays about this and they deny that this is the case. They claim they have "removed the need for a Personal Guarantee if the loan amount is less than £250k".

I can't vouch for the truth of this, however, the lady I spoke with says she is happy to look into your client's complaint. If you would like to do this, let me know and I can private message you her contact details, or you can private message me your client's contact to give to her.

I will also try and provide some further information on the scheme in the coming days, but finding the truth in all of the smoke and mirrors is another story...

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By Carl London
01st Apr 2020 12:35

Brilliant! I have now had confirmation from Barclays that they have dropped the PG criteria as you said.
This has now opened up the possibility of another client being interested :)

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Replying to Carl London:
Maddy Christopher
By Maddy Christopher
01st Apr 2020 13:26

That's great news.

I also contacted Natwest, but had no response. I'll be publishing an article later today that should help shed some light on the situation. Fingers crossed Sunak and the BoE step in more and more to make this loan actually helpful.

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By Bertie Black
09th Apr 2020 10:11

Our application is with Barclays and our RM in the UK has been great. Unfortunately it seems the credit applications have to be approved by a team in India and as India is in lockdown this is causing huge delays to the response times.

Update - loan sanctioned 8 April.

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By Nshaw
14th Apr 2020 16:19

Just come off the phone with Lloyds re the CBIL loan. Very interesting and disappointing. In effect Lloyds are excluding any small company from taking a loan through them. I was wondering how to communicate this to BBB who are the ultimate fund holder.

Lloyds called to discuss our CBIL application. Clearly they had not looked at the documents that I included.. Lloyds have changed the criteria. As they cannot ask for PGs they have introduced requirements that effectively rule out small business.

They require 3 years consistent profits
Detailed personal income and expenditure for all the directors
Cashflow projections
1st call on company assets.

When I complained that the criteria were prohibitive, I asked to speak to one of the managers. I got a second call from a Lloyds manager who went through the criterial again. I pointed out that this effectively excludes all small R&D companies and innovative technology companies just starting commercialisation. She accepted this argument but said that they were not prepared to look at covering the 20% that they could be left with in case of failure to repay. As a now private bank they could make their own criteria and if we did not like it then we could move to another bank.

as of 16:15 today, I have just had another call from Lloyds confirming that they will not be offering a CBIL loan and confirmed that they had not even looked at the cashflow, accounts and other documents they had requested.

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