David Castling, Atom Bank

A broker's guide to applying for a CBILS loan

The Coronavirus Business Interruption Loan Scheme or CBILS has been around for a few months now, after it was launched to help smaller businesses access finance during this difficult time.

The application process is detailed and can be complex, so, to help with this, David Castling - Director of Intermediary Lending at Atom bank has provided some guidance to make sure you have all the information you need.

A comprehensive and well-packaged application is the key to a speedy and successful outcome.

1. Tell the story
It’s important to get a full and detailed story to support your application. This helps the underwriting team fully understand the risks and benefits of the case and avoids unnecessary back and forth to get further information from you and your client. Ask open-ended questions and be as thorough as possible.

2. Structure of the proposal
It sounds like an obvious question, but who is the borrower? There could be a group of companies, a parent company, an Opco/Propco structure or something more complex.

In some applications, we’ve found that these are incorrectly stated or not clear. It’s crucial that this is accurate in order to avoid the deal changing shape at a later date and potentially being declined if it is then no longer viable.

3. How have they been impacted?
In the application, you need to state the reason the business is eligible. CBILS is designed to help those impacted by Covid-19, not which were failing previously. There are specific rules around this, so get in touch with your BDM to discuss before submitting the case.

Honesty is the best policy; tell us everything about how the business has been impacted as a result of Covid-19 - no detail is too small.

4. Recovery plan

Include as much detail as possible on how the business plans to reopen, their recovery strategy and how they will trade at higher capacity again.

This needs to be realistic and not just, ‘things will return to normal’ – which is highly unlikely in the short term.

5. What will the loan be used for?
How will the loan benefit the business and how does this link to their recovery plan? If this is for working capital, what specifically do they mean by that?

6. Financial accounts
Final year-end accounts are required, and management accounts may also be required if the year end is more than nine months ago. The date on which companies need to submit accounts to Companies House does not change the requirements of a lender necessarily.

7. Fully completed application form 
At Atom, we’ve recognised common themes that have resulted in an incomplete application form. For example, if interest-only has been requested, what is the benefit to the business?

Another factor is the age of the applicant. Individuals in the business must be no more than 80 years old at the end of the repayment term. If they will be more than 70 years old at the end of the repayment term, we will want to see evidence that a succession plan is in place, for example, the sale of business or family take over.

It’s also worth noting the need for supporting documents. If the individuals have any investment properties, we would like to see their property schedule.

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