Fiduciam, the institutionally funded short-term lender, has been approved for accreditation by the British Business Bank as a lender under the Coronavirus Business Interruption Loan Scheme (CBILS).
CBILS, delivered through British Business Bank accredited lenders, is designed to support the continued provision of finance to UK smaller businesses (SMEs) during the Covid-19 outbreak. The scheme enables lenders to provide facilities of up to £5m to smaller businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cashflow.
Fiduciam will offer Business Bridge Loans, Refurbishment Loans, Permitted Development Loans and Development Loans under CBILS. Loans will be from £250,000 up to £5million under the scheme, available in a single drawdown or multiple drawdowns. Interest rates and fees are covered by the government for the first 12 months, so borrowers benefit from no upfront fees and lower finance costs.
In addition, Fiduciam’s standard interest rate levels have been reduced to reflect the guarantee the government provides to Fiduciam. Fiduciam’s CBILS offering comes without early repayment charges or exit fees, providing borrowers with full flexibility in these uncertain times. Furthermore, Fiduciam has waived its application fee, so that potential borrowers can check their CBILS eligibility and loan terms without incurring any costs.
Fiduciam expects strong demand for its CBILS product from the construction, property, healthcare and hospitality sectors, but is also open to the agri-food, manufacturing and entertainment sectors.
All loans granted by Fiduciam will need to be secured against property owned by the borrower, in line with Fiduciam’s standard lending policy and criteria. Maximum loan-to-value (LTV) for properties from which a business is not being traded, is 70% for residential and semi-commercial property, and 65% for commercial property. Maximum LTV for trading properties is 70% of vacant possession value and 60% of operating value.
Fiduciam’s CBILS offering has a borrowing term of up to three years. Subject to certain conditions, existing debt can also be refinanced with a CBILS facility and the same terms will apply to both new and existing customers.
To be eligible for a facility under CBILS, the borrower’s business activity must be UK based with a turnover of no more than £45m per year. The borrower must have been adversely impacted by the Coronavirus and the purpose of the loan needs to be viable, were it not for the Covid-19 crisis.
Fiduciam has partnered with Ask Inclusive Finance (AskIf) for quick operational delivery of its CBILS programme. AskIf was founded to address the large gap in loan funding available to start-ups and SMEs, which make up 99% of UK businesses. As a CBILS accredited lender with a proprietary tech platform to enable streamlined delivery of smaller loans to SMEs, AskIf is delivering inclusive and responsible funding to SMEs from both its own wholesale funding vehicles and in partnership with such lenders as Fiduciam.
Whilst the scheme provides Fiduciam with a government-backed guarantee against the outstanding balance, the borrower always remains 100% liable for the debt. Recoveries under personal guarantees are capped at a maximum of 20% of the outstanding balance of the CBILS facility, after the proceeds of business assets have been applied. A guarantor’s principal private residence cannot be taken as security to support a personal guarantee or as security for a CBILS backed facility.
Johan Groothaert, CEO of Fiduciam added, “As always, where the banks do not lend, we are here to help. We fill a gap left by the high street banks, by providing short-term credit to allow SMEs and entrepreneurs to progress their projects to a stage where high street bank financing becomes available or revenues can pay off our loan. During the Covid-19 crisis we continued to stand by our SMEs and entrepreneurs by advancing new loans. We now want to give them a boost out of this crisis, with the Coronavirus Business Interruption Loan Scheme (CBILS) and are very proud to have been approved for accreditation by the British Business Bank.”