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Refinance with the Government’s CBILS loan scheme

Managing Finances

Refinance with the Government’s CBILS loan scheme

Updated: 22 September 2020

Business debt comes in many forms, whether it’s an overdraft, credit card,  asset finance or a fixed term loan. With different rates, fees and payment dates,  monitoring your finances can eat up a lot of time. However, consolidating debt into one monthly payment with CBILS can lower your costs and be easier to manage. Below, we look at the Government’s CBILS  loan scheme , what you can refinance, as well as the benefits and limitations of doing so.

What is the Government’s CBILS loan scheme?

The Coronavirus Business Interruption Loan Scheme (CBILS) is provided through the British Business Bank and a group of accredited lenders. It’s focused on providing financial support to SMEs who have been impacted by coronavirus. 

What can you refinance with a CBILS loan?

There are no limits on what you can refinance with a CBILS loan. Overdrafts, credit cards, existing business loans, cash advances, asset finance and more can be refinanced through the scheme. Businesses are able to apply for a loan of up to 25% of their annual turnover, so you can settle any debts up to this amount. 

Benefits of refinancing with CBILS

As CBILS is provided through the British Business Bank on the behalf of the Government, loans under the scheme come with some unique features to help businesses through the pandemic.

No repayments for 12 months

All Funding Circle CBILS loans come with  a 12 month repayment holiday as standard, giving you some breathing space to manage the uncertainty of the pandemic. This is an additional benefit provided by Funding Circle that is not part of the standard CBILS features, and is not widely offered by other providers.

Fixed monthly repayments after 12 months

If you choose to consolidate your existing debts into one single CBILS loan, you’ll be able to replace them with a single monthly repayment (which will start 12 months after you take out the loan). All our loans are fixed rate too, so you know exactly what is due each month. This reduces the risk of missing repayments and makes it easier to manage and plan cash flow.

Lower costs

Under CBILS  the Government will pay your first 12 months of interest. As this is the period where you are normally charged the most interest, this can lead to a substantial saving. The Government also pays any upfront fees when you take out a loan. 

At Funding Circle, the interest rate you’ll pay on a CBILS loan is between 1.8-7.4% APR. If you have debt with other providers, check what rates and fees you’re paying. Refinancing with a CBILS loan could lower your monthly repayments or lower the overall costs you’ll pay.


These payments by the Government  combined with the 12 month repayment holiday means that, if you pay back the full loan amount within the first year, it won’t have cost you a penny. 

No personal guarantee up to £250,000 and any existing one is cancelled

Personal guarantees are not required for any CBILS loan up to £250,000, giving you added peace of mind. 

What’s more,  if you have an existing loan with us with a personal guarantee attached to it, by refinancing with a CBILS loan, that personal guarantee will be cancelled. 

Other providers may also cancel an existing personal guarantee if you refinance with a CBILS loan.

Limitations of refinancing with CBILS

While there are some really compelling reasons to refinance with a CBILS loan, like with any consolidation, there can be some limitations which may affect your decision.

Early settlement

Some providers, including Funding Circle will only allow you to repay early if you settle your loan in full. If you’ve consolidated a multitude of debts into one large loan, that loan may therefore be more difficult to pay off in one hit if you choose to repay early.

You can only take out 25% of your annual turnover

One of the conditions of CBILS is that you can only take out a loan that is up to 25% of your annual turnover. This means that if 25% of your business’ annual turnover is less than the amount you need to consolidate, you can’t refinance all of your existing debt with a CBILS loan.

Your overall costs may increase

While taking out a CBILS loan over a longer period of time will potentially decrease your monthly payments, it’s worth remembering that you’ll be paying interest back over a longer term too. This means that while your monthly repayments may go down, the amount you pay overall may actually increase. In terms of month-to-month cashflow, this could still be a win for your business, but it’s definitely worth considering before taking out a CBILS loan to refinance your business debt.

Can you refinance with a Bounce Back loan (BBLS)?

If your business debt amounts to less than £50,000, a Bounce Back Loan (BBLS) is another refinance option. A BBLS loan can be used to consolidate any credit card, overdraft, asset finance, existing loans or cash advances you may have accumulated, and the rate of interest is fixed at 2.5% while the term is fixed at 6 years. There’s also no repayments for 12 months and the first year’s interest is paid on your behalf by the Government, so it offers similar features to a CBILS loan.

The main drawbacks are that the scheme only covers loans of up to £50,000, so if your business debt is higher than that, may want to consider a CBILS loan. In addition, BBLS loans can only be taken up to the value of 25% of your annual turnover, so as with CBILS, if this amount is lower than what you need to refinance, this may not be the best option for you.

How does refinancing work at Funding Circle?

At Funding Circle, consolidations can typically take three forms:

  • A new customer who wants to combine multiple debts with other providers into one, affordable, fixed rate loan
  • An existing customer who wants to refinance their existing loan to take advantage of the features of CBILS 
  • An existing customer who wants to take out further finance, and consolidates their existing loan at the same time

In these scenarios, the interest rate you’re charged will depend on a variety of factors, including the amount you’re looking to borrow, your loan term and your business’ credit rating.

If you’re looking to refinance with a CBILS loan, you can check your eligibility in just 30 seconds

It’s important to remember that when taking a loan your business is liable for the full loan amount. The CBIL and BBL schemes provide a guarantee to the lender, not to the business.

All information is correct at time of publishing. While we want to help as much as we can, the information and documents found here are provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here.If you have any questions, please speak to your professional adviser or seek independent legal advice.

The Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme (BBLS) are 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. The provision of CBILS or BBLS should not be construed as an endorsement or warranty of Funding Circle by the British Business Bank, or the government of the United Kingdom. British Business Bank plc is wholly owned by HM Government and is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). Full details on CBILS and BBLS and the list of participating CBILS and BBLS lenders can be found on the British Business Bank website.

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