Why has my business been rejected for a CBILS loan?
Why are businesses struggling to get Coronavirus Business Interruption Loans Scheme?
Our research at Cloud Accounting LLP has found the potential for some businesses to be left with a choice of only three lenders under CBILS.
There are 32 active lenders, of which 12 restrict CBILS to existing customers only. If the business is not a customer of those, this leaves 20 active lenders.
There are 14 regional lenders, so if the business is not in one of these areas, this leaves seven active lenders.
There are three high street lenders then available, if the business does not meet their credit requirements, then the business will have a choice of three lenders remaining.
These would be Aldermore, Askif Inclusive Finance (only offer loans of £10,000 to £60,000) and Bank of Ireland.
Cloud Accountimg LLP has access to 25 alternative business lenders, none of which currently participate in CBILS. These lenders could bring much needed diversity to your search for a loan, by potentially accepting those businesses that are not existing customers of other lenders or that do not meet their minimum requirements for credit.
The use of personal guarantees is commonplace in business lending, as many lenders use this make sure that if a loan defaults they can recover their losses. CBILS does not allow personal guarantees on loans below £250,000 and for loans greater than this there is a cap of 20% that can be recovered from personal assets. Some lenders may be concerned that their own operation is at risk if they accept these terms and/or the actual number of businesses they could accept without these guarantees would be severely limited.
If you have been rejected for a CBILS loan then call us to find alternative finance.