Coronavirus Business Interruption Loan Scheme

(asked on 29th April 2020) - View Source

Question to the Department for Business, Energy and Industrial Strategy:

To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps he is taking to ensure that the British Business Bank's Borrower Viability Test does not prevent otherwise viable businesses from accessing the Coronavirus Business Interruption Loan Scheme.


Answered by
Paul Scully Portrait
Paul Scully
This question was answered on 11th May 2020

In order for a business to be eligible for the CBILS, it must be considered “viable” by the lender prior to the onset of COVID-19. The lender must consider that the applicant (or its business group) has a viable business proposition determined by the lender’s underwriting policies.

The viability test was amended in April to remove the requirement for lenders to include a ‘forward-looking’ element, which required an assessment of whether the business can trade out of the COVID-19 crisis. This means that any concerns over its short-to-medium term business performance due to the uncertainty and impact of COVID-19 cannot be taken into account when a lender is considering an application for a loan.

For smaller value facilities (e.g. those of £30,000 or below), in determining the eligibility of the applicant, lenders may decide to determine the applicant’s credit worthiness based on its internal credit scoring models.

Reticulating Splines