Managing cash flow has always been crucial to the health of a growing business. But as companies of all shapes and sizes come under stress due to drastic measures designed to halt the spread of coronavirus, it’s more important than ever before.

One of the best ways that SMEs can help boost their cash flow is with invoice finance. 

Thankfully, invoice finance is included in the recently-announced Coronavirus Business Interruption Loan Scheme (CBILS), which has been set up to help SMEs raise finance to tackle the challenging new business environment.

The scheme is designed to make lenders more comfortable with lending to SMEs. It works by giving lenders a government-backed guarantee for the loan repayments so that they don’t have to shoulder the risk of not getting paid back. This doesn’t change things for the SME itself, of course – the business is still fully liable for the debt.

However, one key change that will help SMEs is that the Big Four banks (Barclays, HSBC, Lloyds, RBS) are now NOT requiring personal guarantees as security for lending below £250,000. The personal guarantee requirements have put off business directors from borrowing in the past, so this change is expected to help SMEs to borrow.

As well as invoice finance, the products on offer under CBILS include:

  • Term loans
  • Overdrafts
  • Asset finance

More information about the scheme can be found here, but a short summary appears below.


What is on offer?

Term loans, overdrafts, and asset finance. In terms of invoice finance, facilities of up to three years are available.


Am I eligible?

You can check the full list of criteria here. SMEs are eligible if they’re based in the UK, turn over less than £45 million per year, and have a borrowing proposal that a lender would consider viable were it not for the COVID-19 pandemic.


How do I apply?

To benefit from a CBILS facility, a business has to talk to its bank or to one of the 40+ accredited lenders. The list is growing daily and includes high-street banks, challenger banks, asset-based lenders and smaller specialist local lenders.


Where can I learn more?

General advice and information on how to cope with the coronavirus outbreak’s impact on business can be found on the website of the Business FInance Guide. This is being updated regularly to reflect changes and new initiatives.



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