Digital bank Starling has been accredited by the British Business Bank as a lender under the government-backed Coronavirus Business Interruption Loan Scheme (CBILS). This will enable it to provide term loans between £5,000 and £250,000 to small and medium-sized enterprises (SMEs) that are struggling financially as a result of the coronavirus emergency. Starling will shortly confirm the date from which it will be ready to start receiving CBILS applications.

Under CBILS, 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. No personal guarantees will be required, so borrowers and guarantors will not have to put up their principal private residence as security.

SMEs with an annual turnover of up to £45m can apply for a Starling CBILS term loan, if they meet all of the following criteria:

• Limited Company or Limited Liability Partnership.
• Trading for more than 18 months.
• Have a good credit history with no arrears or defaults.

Starling is also offering business overdrafts of £1,000 to £150,000 under the Scheme, with Sole Trader businesses also eligible to access a business overdraft up to £25,000. 

Loans are available for terms of up to five years. Overdrafts are a revolving credit facility, and renewable annually. SMEs will be able to apply for CBILS loans via the Starling 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, Starling Bank’s chief banking officer. “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.”

Under the Scheme rules, the government will provide lenders with a guarantee of 80% of the outstanding principal on each loan. For loans to qualify, customers must have a borrowing proposal that the lender would consider viable if not for the coronavirus pandemic. Borrowers will remain liable for repayment of 100% of the loan. 

CBILS is managed by the British Business Bank on behalf of, and with the financial backing of the Secretary of State for Business, Energy and Industrial Strategy (BEIS). Full details on CBILS and the list of participating CBILS lenders can be found on the British Business Bank website.