The Solution For When CBILS Repayments Bite Back

CBILS to RLSWhen CBILS Bites Back

CBILS finally ended on 31st March 2021, as of June 2020 £38bn had been advanced to 910k businesses.

Between now and March 2022 businesses will need to start making repayments to these loans or seek agreement from their lender for special terms outside of the standard CBILS scheme.

Many of these firms will have CBILS repayments starting at the same time as interest rates are projected to rise, with inflation and fixed costs rising this could mean that the new loan repayments are a burden too far.

In contrast, the successor to CBILS, the Recovery Loan Scheme (RLS) has seen a much lower take up. Not surprising given the terms are much less preferable.

However, I think many of these CBILS borrowers may be missing a trick.


Remember that loans under £250k carry no personal guarantee requirement, so the level of director risk is low whether that be via CBILS or RLS.

What many firms fail to realise is that RLS can be used to repay CBILS.

You may think this is swapping like for like with no benefit, which can be correct in some cases (in which case don’t do it) but take a closer look at the RLS options:

  • The RLS interest rate is capped and therefore the interest being charged may be lower than CBILS
  • RLS can be done with 12 months interest only payments. If this is used to repay CBILS then the impact on cash flow is lessened for the next year
  • RLS can refinance CBILS and be used to raise capital if required

The highlight part here is that the impact of repayments to CBILS can be lessened by using RLS, the caveat is that RLS is only here until 31st December.

For any CBILS borrowers that want to review their options then it would be best to do so before the end of November.

How To Apply

Put simply, we need:

  • The 2019 year end accounts
  • The most recently filed year end accounts
  • A P&L and Balance Sheet as up to date as possible

If we can get the 2019 figures and the up to date figures to becomes easier to ignore the Covid impacted period. Where the Covid impacted period provides a better picture then we can use those figures instead.

Drop us a line and we will do the rest.

Hope it helps.

By Dave Farmer

*Remember, whenever taking any borrowing, always understand what you are committing to and ensure you are aware of the risks and commitment you are entering into

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