Home  →  COCO- Financial Support Backed By The Banks



If you have any questions, please get in touch with our COVID-19 Task Force here

RELEVANT AS OF 1:00PM 4 March 2021

The Chancellor announced two new programmes to support businesses in the March 2021 Budget both of which will be delivered by the British Bank.

The Recovery Loan Scheme will launch on 6 April 2021, following the closure on the 31 March 2021 of the Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS) and the Bounce Back Loan Scheme (BBLS).

The Recovery Loan Scheme

The Recovery Loan Scheme is new debt finance programme to help businesses affected by Covid-19 and can be used for any legitimate business purpose, with all interest and fees paid by the business from the outset.  Key features of the new scheme are:

  • Debt facilities up to £10m per business will be made available (£1k minimum facility for and asset and invoice finance and £25k minimum for term loans and overdrafts)
  • No turnover restriction for businesses accessing the scheme
  • Facilities available include term loans, overdrafts, asset finance and invoice finance
  • Up to six year term lengths for loans and asset finance facilities and up to three years for overdrafts and invoice finance facilities
  • Business who have taken out CBILS, CLBILS or BBLS facility will be able to access the new scheme subject to lenders assessment of debt capacity and scheme requirements. Short to medium term concerns over performance owing to pandemic lenders may be factored into this assessment
  • Credit and fraud checks for all applicants

Future Fund – Breakthrough

This new £375m scheme will launch in early summer 2021 and will encourage private investors to co-invest with government in high-growth innovative firms.

The scheme will see private venture capital matching government money in UK based R&D intensive companies, to help accelerate the deployment of breakthrough technologies which can transform major industries, develop new medicines and support the UK transition to a net zero economy.

Minimum investment round will be £20m and delivered by the British Bank, via its subsidiary British Patient Capital. Breakthrough is separate to from the Future Fund which has now closed.


As a reminder, CBILS is broadly for SMEs with less than £45m turnover (applied on a group basis). It  is a guarantee scheme designed to support loans or overdrafts of up to £5m, initially up to six years and recently extended by the Chancellor to a maximum 10 years to help businesses to repay the loans. The business remains liable for the borrowing in the first instance, but the government covers 80% of the liability if it isn’t repaid in due course. The government will pay to cover the first 12 months of interest payments and any lender-levied fees.  The funding will be provided by banks and other lending institutions. The minimum facility under the CBILS scheme has been clarified as £50,001 to avoid any risk or confusion with the new Bounce Back Loan Scheme.

In terms of personal guarantees:

  • they cannot be requested for loans of under £250,000
  • where loans are greater than £250,000, personal guarantees will be limited to 20% of any outstanding balance after applying the proceeds from the sale of business assets.
  • Personal guarantees cannot be secured against the guarantor’s principle private residence.

To have the best chance of a successful application, first and foremost a business should be able to demonstrate how it will recover from the Covid-19 impact and how the incremental debt can be repaid over subsequent years.

One word of caution here for SMEs is the interaction between CBILS and your R&D tax relief claims. The Government has notified CBILS as a State aid, meaning that if you apply for CBILS there is the potential that you will no longer be able to claim very generous R&D tax relief under the SME regime. Get in touch here and we can advise on the impact to your R&D claim. More details on this can be found here from our R&D partner Chris Knott. 


The government have acted in response to representations that there was no additional funding support for businesses with an annual turnover over £45m by introducing CLBILS.

CLBILS is a guarantee scheme designed to support loans of up to £200m at commercial rates of interest with the benefit of a government guarantee of 80% of the loan.

Larger businesses are now able to borrow up to the lower of 25% of turnover, or £200 million. Those borrowing more than £50 million will be subject to restrictions including a ban on dividend payments and cash bonuses, except where they were previously agreed.

Finance terms are from three months to three years depending on the type of finance, but unlike CBILS the government will not pay the associated fees or interest for the first 12 months. There are no personal guarantees required for facilities under £250k

Future Fund

The Chancellor announced an initial commitment of £250m to establish a new Future Fund to support the UK’s innovative businesses adversely affected by Covid-19. These businesses have typically been unable to access other government support programmes, such as CBILS, because they are either pre-revenue or pre-profit and typically rely on equity investment.

The Future Fund provides government convertible business loans ranging from £125k to £5m, subject to at least equal match funding from private investors (from UK or overseas). Companies applying must be unlisted and have raised a minimum of £250k from private backers within the last 5 years. The Future Fund is managed by the British Business Bank and is now closed for new applicants.


This is a separate fund announced by the government which is aimed at businesses carrying out R&D. The £200m fund will be open to companies across all parts of the UK who need urgent financial support to keep their cutting-edge projects and ideas alive.

In particular, the target for this funding is projects with sustainability at their heart. Examples given are projects with a focus on:

  • Decarbonisation;
  • Climate change;
  • Geographic or regionally-targeted innovation;
  • Innovation that is aimed at commercial or residential users;
  • Innovations that work across more than one sector;
  • Follow-on international opportunities that help the UK lead the world.

Each organisation working on eligible projects, alone or in a collaboration, can claim a maximum of £175,000.

Eligibility criteria for the funding are:

  • Can be claimed by UK registered businesses (not sole traders) of any size but involve at least one SME
  • Total eligible project costs between £100,000 and £500,000
  • Projects must be carried out in the UK, be ready to start by 1 October 2020 and can last between 3 and 9 months
  • The claimant organisation was not in difficulty on 31 December 2019 but faced difficulties later as a result of coronavirus

You can read further information and apply for the grant on Innovate UK’s website, here.

Bounce Back Loan Scheme

Small businesses struggling amid the covid-19 pandemic have received some welcome news with the government announcing a new fast-track micro loan scheme.

The Bounce Back Loan Scheme (“BBLS”) will help small and medium businesses borrow between £2k and £50k, with the government guaranteeing 100% of the advance. With a simple online application process (seven questions) and simplified eligibility criteria it is hoped that many applicants will receive funds in a matter of days if not 24 hours post application.

Bounce Back loans will be repayment free (interest and capital) for the first 12 months. Loan terms will be up to six years and the government will work with lenders to agree a low flat rate of interest of 2.5% for the remaining term of the loan. The Chancellor has recently announced the BBLS repayment structure will be converted into “Pay as You Grow” – offering a more flexible repayment system including extending the length of the loan up to 10 years, interest only payments and payment holidays.

All three government Coronavirus business interruption schemes (CBILS, CLBILS and BBLS) and the Future Fund now have extended and aligned application end dates of the 31 March 2021.

AT A GLANCE: What financial help might your business get?

The table below summarises the key financial support measures announced for businesses of different sizes

Firm Size
Turnover < £45m Turnover > £45m Investment Grade
Bounce Back Loans (Up to £50k) X X X
Coronavirus Business Interruption Loan Scheme (CBILS) X
Coronavirus Large Business Interruption Loan Scheme (CLBILS) X X
Covid Corporate Financing Facility (CCFF) X
Job Retention Scheme X X X
Business Grants (dependent on rateable value of the property) X X X
VAT Deferrals and Time to Pay X X X
Statutory Sick Pay Rebate Scheme (employers with less than 250 employees as at 28 February 2020) X X X
Future Fund (only if VC funded) X X

If you are looking for help with funding, we have a number of specialists in the team who worked through the 2008-10 crisis. Please get in touch with our CF Partner Ben Rookes.

Detailed information on the CBILS scheme and accredited lenders can be found here.

Details in relation to the CLBILS scheme and accredited lenders can be found here.

Details in relation to the Bounce Bank Loan Scheme can be found here.

Our CFO, James Parnell, shared his own views on some of the issues involved in accessing funding when it was first announced. It’s well worth a scan – and you can read it here.


Andy Parker and Ben Rookes, Partners in our Corporate Finance team share some great insights on this webcast about Cashflow and Access to Funding.

If you have any questions, please get in touch with our COVID-19 Task Force here