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CBILS interest rates explained


CBILS interest rates explained

Updated: 19 October 2021

The Government launched the Coronavirus Business Interruption Loan Scheme (CBILS) in spring of 2020. To help businesses affected by the pandemic, it came with some unique features, including savings on interest. Here we look at how the scheme works.

How do CBILS interest rates work?

When you apply for a CBILS loan, the lender will assess your application in much the same way they would do normally and, if they make you an offer, you’ll be given an interest rate. 

However, as part of the CBILS scheme, the Government will pay the first 12 months’ interest (and any upfront fee) for you, helping to reduce the cost of the loan. The first year is usually when interest is at its highest as you still have most of the balance outstanding, so the savings can run into hundreds or thousands of pounds. 

You also don’t need to do anything to claim it, it’s all handled between the lender and the British Business Bank. You’ll just have less to pay on your repayments. 

What happens after the 12 month interest-free period?

After the initial 12 month interest-free period, you’ll then start paying the interest that’s charged on your loan. 

At Funding Circle, we also give you a 12-month repayment holiday when you take out your loan. So at the end of the first 12 months, you’ll begin repaying the principal.

What interest rate will I pay on my CBILS loan?

The rate you pay on your CBILS loan will depend on the lender, your loan term, and a number of factors such as the creditworthiness of your business. When assessing the loan, lenders will look at whether you would have been approved were it not for the pandemic. 

At Funding Circle, interest rates for our CBILS loans range between 1.8% – 7.4% APR and all our CBILS loans are fixed rate.

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.

CBILS and BBLS are managed by the British Business Bank on behalf of, and with the financial backing of, the Secretary of State for Business, Energy & Industrial Strategy. British Business Bank plc is a development bank wholly owned by HM Government. They are not authorised or regulated by the PRA or the FCA. Visit

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