Loan scheme came under fire for excluding thousands of charities

Charities no longer need to show that half their income comes from trading to be eligible for the UK government’s Coronavirus Business Interruption Loan Scheme (CBILS).

The scheme previously came in for criticism after charities warned that many charities did not have anywhere near a 50% trading income and therefore it made them ineligible, despite the government citing the scheme as one its support packages for the sector.

However the British Business Bank, which is running the scheme, updated its terms stating: “Charities are in principle eligible if they satisfy the other eligibility criteria of the scheme. “Note: registered charities are exempt from the requirement that 50% of the applicant’s income must be derived from its trading activity.”

British Business Bank operates CBILS via its accredited lenders. There are over 40 of these lenders currently working to provide finance.

CBILS gives the lender a government-backed guarantee for the loan repayments to encourage more lending.

The borrower remains fully liable for the debt.

Under the scheme, personal guarantees of any form will not be taken for facilities below £250,000.

For facilities above £250,000, personal guarantees may still be required, at a lender’s discretion.

See Coronavirus Third Sector Information Hub for funding opportunities in Scotland.