The British Business bank has approved UK challenger bank Starling Bank as a lender under the government-backed Coronavirus Business Interruption Loan Scheme (CBILS).
What that means is that the digital bank will be able to grant term loans between £5,000 and £250,000 to British SMEs that are struggling financially because of the coronavirus pandemic. Small businesses who get the loan can see the first 12 months of interest on the facility and any arrangement fees will be paid by the UK government as a business interruption payment. This means smaller businesses will benefit from no upfront costs and lower initial repayments.
To be eligible for the loan, the small companies applying cannot have a turnover over £45m. Moreover, they must have been trading for more than 18 months, be a limited company or a limited liability partnership, and a have a good credit history.
Starling is also offering business overdrafts of £1,00 to £150,000 under the CBILS, with sole trader businesses also eligible to access a business overdraft up to £10,000.
Starling Bank has not yet confirmed the date it will start to receive CBILS applications, but says that SMEs will be able to apply via the digital bank’s website.
“Business owners who have poured their heart and soul, not to mention their life savings, into successful enterprises are crying out for help,” said Helen Bierton, chief banking officer at Starling Bank. “The important thing now is to get money into their hands. We believe that CBILS is the best way to do this. We’re delighted to be working with the British Business Bank as a CBILS lender.”
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