CBILS - what can loan be used for?

Are there specific guidelines on what the loan can be used for?

Didn't find your answer?

I've been looking at the detail on the British Business Bank website and cannot see anything that specifically states what the loan can and cannot be used for, apart from to ease the financial problems arising from the lockdown measures.

If there are any such guidelines please could someone give me the link?

The particular question relates to a client trading company that has a term loan, where the interest increases steeply if not repaid within the term (this summer). Their chances of generating the income to repay the loan have been reduced to zero, whereas before the lockdown they were on target to generate income to repay the loan. 

They have applied to their bank for a CBILS and the bank have said it doesn't meet the criteria.

I want to check that it's the particular bank's criteria they are referring to, not the governments. 

Thanks.

Replies (4)

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the sea otter
By memyself-eye
28th Apr 2020 18:56

This loan (so I'm told) is not available if you already have a loan outstanding - maybe that's why the bank said 'no'

That apart how could anyone monitor or specify what the loan is used for?

Thanks (1)
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By Cheshire
28th Apr 2020 21:02

Iv not seen any restrictions for business with existing loans or other existing facilities, but there are restrictions for some sectors.

I think they should challenge the bank to find out what specific criteria they are referring to. They can of course look to other banks and finance providers.

They might have more luck with the new scheme.

Thanks (1)
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By SXGuy
29th Apr 2020 06:59

A client of mine was refused on the grounds that he needed a proposal as to what the loan was intended for. It seems you still need one which would have been viable had it not been for the outbreak.

However it may be best waiting till Monday and applying for the government's bounce back loan instead.

Thanks (0)
avatar
By SXGuy
29th Apr 2020 06:59

A client of mine was refused on the grounds that he needed a proposal as to what the loan was intended for. It seems you still need one which would have been viable had it not been for the outbreak.

However it may be best waiting till Monday and applying for the government's bounce back loan instead.

Thanks (1)