Coronavirus Business Interruption Loan Scheme

The Coronavirus Business Interruption Loan Scheme (CBILS) is designed to support existing HSBC UK customers who have a borrowing need which we would consider viable were it not for the COVID-19 pandemic.

At a glance:

  • A Government guarantee which secures bank loans to any viable business with a sound borrowing proposal

  • No fee required for Government guarantee

    No loan arrangement fee or loan prepayment fee, should you wish to repay early

  • Available for sums of £50,001 to £5,000,000*1

  • Variable interest rate with option to fix

  • An interest free period of 12 months will apply*2, after which you will be charged:

    • 3.49% over Bank of England Base Rate for loans up to and including 3 years
    • 3.99% over Bank of England Base Rate for loans over 3 years
  • No repayment of capital required during the period of 12 months from drawdown*3

    The loan can be repaid over any period up to 6 years

Apply for CBILS

Key benefits

The government can back your proposal to help you get the funding you need.
Financial support through the short-term uncertainty due to COVID-19.
CBILS is available even if we are comfortable to lend under our standard commercial terms.

Quick check CBILS eligibility criteria

If you can answer ‘yes’ to all of the following questions, you may be eligible for CBILS:

  1. Are you an existing HSBC UK business customer?
  2. Is your business based in the UK?
  3. Will the funding you require be used to support business activity within the UK?
  4. Is over 50% of your business turnover generated from trading activity*4?
  5. Was your 2019 business turnover less than £45m? If your business is part of a larger group of companies, please use the total group turnover.

    If your turnover was more than £45m, please click here.

  6. Do you operate in an eligible sector*5?
  7. Is the loan to be used for an eligible purpose related to COVID-19*6?
  8. The amount you require is between £50,001 and £5,000,000?
  9. Is funding required for 6 years or less?
  10. Your business was not an ‘undertaking in difficulty’ as at 31 December 2019*7?
  11. You understand that you will be liable for 100% of any facility that may be provided, and that HSBC will always seek to recover the outstanding balance of any facility from you and the proceeds of any security you, or any security provider on your behalf, has given for the loan?

Important Information

  • You are liable for repaying 100% of the loan and HSBC will always seek to recover the outstanding balance from you and any security you, or any security provider on your behalf, has taken under the loan.
  • Under the Business Interruption Payment rules, the maximum assistance that can be provided across all types of government support (including any other CBIL facilities or any other tax or payments advantages under the temporary state aid framework) is €800,000, with restrictions in certain sectors.*8
  • No personal guarantees required in connection with loans of less than or equal to £250,000.
  • For lending greater than £250,000, we will review security requirements on an individual basis. If a personal guarantee is deemed appropriate, it will be taken for maximum of 10% of the loan amount we agree with you.*9
  • It is not necessary for you to hold a Business Current Account with us in order to apply for or maintain this loan, unless we are seeking a debenture or fixed charge over book and other debts as security for the loan.
  • Under Scheme rules, you are unable to have both a CBILS and BBLS loan.

Next Steps

To apply for CBILS, click here

You can also call us on 08000 121 614*10 or speak to your Relationship Manager.

We will only ask you for information and data you may reasonably be able to provide at speed and we will not insist on the provision of forward looking financial information or business plans from businesses applying for CBILS.

Important Information

Useful Links

CBILS is delivered by the British Business Bank, through HSBC UK as an accredited lender. CBILS will support the continued provision of finance to UK SMEs during the Covid-19 outbreak. The Coronavirus Business Interruption Loan Scheme (CBILS) is managed by the British Business Bank on behalf of, and with the financial backing of the Secretary of State for Business, Energy and industrial Strategy (BEIS).

Coronavirus Business Interruption Loan Scheme FAQS

General information

What is the Coronavirus Business Interruption Loan Scheme (CBILS)?

The Coronavirus Business Interruption Loan Scheme (CBILS) is designed to support existing HSBC UK customers who have a borrowing need which we would consider viable were it not for the COVID-19 pandemic.

CBILS is available for existing HSBC UK business customers dependant on meeting eligibility criteria (see eligibility section below).

Please be aware that you’re liable for the entire loan amount. We’ll seek to recover the outstanding balance of your loan from you, as well as the proceeds of any security you, or any security provider on your behalf, has given for the loan. Only after this will we look to realise the government guarantee.

How long will CBILS run for?

CBILS will initially run for six months from 23 March 2020.

Will the CBILS funds run out so I can’t access the scheme?

The Government has confirmed that the amount of funding available under the scheme will be demand-led. Therefore, there is no immediate need to apply if you do not need finance in the short-term.

What’s happening to the old Enterprise Finance Guarantee Scheme (EFG)?

The EFG scheme is temporarily suspended at this point in time. If you wish to apply for a financing facility, we will be able to assess if you are eligible under CBILS.

Guarantees and payments

Will I have to provide a Personal Guarantee or my home as security?

  • No personal guarantees required in connection with loans of less than or equal to £250,000.
  • For lending greater than £250,000, we will review security requirements on an individual basis. If a personal guarantee is deemed appropriate, it will be taken for maximum of 10% of the loan amount we agree with you.*9
  • Regardless of the size of the loan, a Personal Guarantor’s Principal Private Residence will not be used as security for a CBILS Facility.
 

What happens if I can’t make the payment on the loan after 12 months?

If you are concerned that you cannot meet the repayments on your loan after 12 months, then either:

  • Call your Relationship Manager or;
  • If you don’t have a Relationship Manager, call the Coronavirus Customer Support Line as soon as possible on 08000 121 614 (from 08:00 – 18:00 Monday to Friday). 

We’ll assess your situation and discuss your options.

Eligibility

What is the eligibility criteria?

Please see the ‘Quick check CBILS eligibility criteria’ section on this page.

Am I guaranteed to be eligible for CBILS?

Unfortunately, we can’t guarantee that you’ll be eligible. You must be an existing HSBC business customer and you must also meet the scheme rules which are set out in the eligibility criteria here.

Do I need to provide evidence that I have a viable business?

Yes. You must show in your borrowing proposal that were it not for the current pandemic, HSBC UK would consider your business viable.

You must also self-certify that your business has been adversely impacted by the coronavirus outbreak.

We will then assess your borrowing proposal using our normal lending criteria.

I have had de minimis aid in the past, can I still get a loan?

Yes, as long as you meet the scheme's eligibility criteria. Any previous de minimis state aid does not impact your eligibility for CBILS and does not need to be taken into account. CBILS operates as a notified scheme rather than under de minimis as EFG did. There is no interaction between any de minimis state aid previously received by a business and the size of the CBILS facility they can access, should they be eligible.

What sectors are ineligible for CBILS?

The following are not eligible under CBILS:

  • Banks, insurers and reinsurers (but not insurance brokers).
  • Public sector bodies.
  • Further educational establishments if they are grant funded.
  • State funded primary and secondary schools.

There are also certain restrictions around the following sectors and you will need to check carefully around the loan amount being requested:

  • Production of Agricultural Products
  • Fisheries and Aquaculture

What percentage of my annual turnover must be generated by trading activities to be eligible for CBILS?

You must be generating more than 50% of your income from trading activity. CBILS is not designed to support shell companies or investment companies. Trading Activity is defined as any activity that generates turnover (whether or not such activity is carried on with the intention of making a profit)

Can I use CBILS to access finance to pay wages/salaries?

Yes, the CIBL Scheme can be used to support short term cashflow needs. One of the eligibility criteria is for the business to have an annual turnover of no more than £45m.

Is the £45m turnover threshold based on the entirety of the Group or could the funding be taken by a single operating subsidiary? Can the different companies within the group access their “own” guarantee?

If you are part of a group, controlled on either a legal or de facto basis, the maximum turnover applies to the group undertaking.

My company had over £45m turnover previously but this year will be beneath that due to COVID-19, can I apply for CBILS? i.e. is the turnover based on past years turnover, or projected turnover for this year?

Your group turnover must not have exceeded £45m per annum in the 12-month period preceding application based on latest annual accounts.

How should I calculate trading activity and turnover for start ups?

For start-ups, or SMEs which have traded for less than 12 months, you should estimate this based upon your business forecasted turnover for the first 12 months of trading.

Undertaking in Difficulty

 What type of businesses will be captured by the undertaking in difficulty definitions?

As per Scheme rules, you were not an “Undertaking in Difficulty” as at 31 December 2019 as per Article 2 (18) of the Commission Regulation (EU) No 651/2014 of 17 June 2014. You would be considered an Undertaking in Difficulty if:

  • you are a limited liability company (but not an SME* that has been in existence for less than 3 years) and had accumulated losses greater than half of your subscribed share capital (including any share premium) as at 31 December 2019;
  • you are a company where at least some members have unlimited liability for the debt of your company (but not an SME* that has been in existence for less than 3 years) and had accumulated losses greater than half of your capital (as shown in your company accounts) as at 31 December 2019;
  • you were, as at 31 December 2019, subject to a winding up order (by or subject to the supervision of a court), a voluntary liquidation (with confirmation by the court), an administration, a voluntary arrangement or sequestration or bankruptcy or, under English law, you could be placed in insolvency proceedings at the request of your creditors; or
  • you have previously received rescue aid and have not, as at 31 December 2019, reimbursed any loan or terminated any guarantee received as part of this rescue aid; or
  • as at 31 December 2019, you have received restructuring aid and remain subject to a restructuring plan; or
  • if you are not an SME, for the two years prior to 31 December 2019, your book debt to equity ratio has been greater than 7.5:1 and your EBITDA interest coverage ratio has been below 1:1.

A company that is part of a larger business group will not be an undertaking in difficulty except where it can be demonstrated that the company’s difficulties are intrinsic and are not the result of an arbitrary allocation of costs within the group, and that the difficulties are too serious to be dealt with by the group itself.

 

*You will be an SME if:

  1. you are an enterprise (being any entity engaged in an economic activity (i.e. the sale of products or services)); and
  2. you employ fewer than 250 persons; and
  3. either (i) your annual turnover does not exceed EUR 50m or (ii) your annual balance sheet total does not exceed EUR 43m**.

 

You can exceed the thresholds set out in 2 and 3 above in exceptional years and still retain your SME status but, if you exceed either of them for 2 consecutive accounting periods then you will lose your SME status.

A newly incorporated enterprise that does not have annual accounts should make a bona fide estimate of its turnover/balance sheet total.

Application information

Where do I go to apply for the CBILS? 

You can apply online by using our CBILS application portal. Please review all of the information before finding the portal link in the ‘Next steps’ section.

How do I apply for a Coronavirus Business Interruption Loan?

If you meet the eligibility criteria you can apply for a Coronavirus Business Interruption Loan via our online portal

Alternatively, you can speak to your Relationship manager or call us on 08000 121 614. Lines are open 8am to 6pm Monday to Friday (except public holidays).

How quickly are these loans approved?

CBILS loans will be assessed through our normal credit assessment process. Where approved, and if Terms and Conditions are satisfied, we will endeavour to make the loan available for drawdown as soon as possible.

I‘m waiting on a response to a query I’ve made, when should I expect to receive a call-back?

We’re working very hard to support our customers in these difficult times and are currently experiencing very high call volumes. We ask customers to please be patient with us, as we work through their calls. We will get back to you as soon as we can.

*1 All loans are subject to status. Terms and conditions apply. Further eligibility criteria may apply.

*2 You can elect to receive a Business Interruption Payment (BIP) from the UK Government to cover the amount of your loan security fees and your first 12 months of interest payments. this will be paid directly to HSBC by the UK Government.

*3 Subject to status, capital repayment holiday can be extended up to 24 months during the life of the loan.

*4 This eligibility criteria does not apply to applicants which are registered charities or further education colleges.

*5 The following trades and organisations are not eligible to apply: Banks, Building Societies, Insurers and Reinsurers (but not insurance brokers); The public sector including state funded primary and secondary schools.

*6 The loan must be used for an eligible purpose related to COVID-19. For example, due to COVID-19 funds are required for Short Term Working Capital;Expanding an existing business; Buying a business (including goodwill); Purchase of equipment; Purchase / lease of property; Developing a project; Additional Research and Development (business must carry out a commercial activity).

*7 As per Scheme rules, you were not an “Undertaking in Difficulty” as at 31 December 2019 as per Article 2 (18) of the Commission Regulation (EU) No 651/2014 of 17 June 2014.

*8 Fishery, aquaculture and agriculture businesses may not qualify for the full interest and fee payment.

*9 If you default on your loan, we will look to realise all other available collateral provided to support your loan before we make a demand on any personal guarantee. The maximum we would then seek to recover under any personal guarantee will be limited to 20% of the amount of your loan that remains outstanding after the proceeds of all other available collateral have been applied. Only after this will we look to realise the government guarantee.

*10 Lines are open 8am to 6pm Monday to Friday (except public holidays). To help us continually improve our service and in the interests of security we may monitor and/ or record your communications with us.

Apply for CBILS

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