Bond and Coronavirus Business Interruption Loan Scheme: Difference between pages

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imported>Doug Williamson
(Clarify that Definition 2 relates to trade finance.)
 
imported>Doug Williamson
(Updated for closure of scheme.)
 
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1.  
''COVID-19 - business continuity - UK.''


A marketable longer-term debt instrument usually administered by a trustee.  
(CBILS).


Bonds typically require the issuer to repay the amount borrowed plus interest over a designated period of time.  
The CBILS was provided by the UK government owned British Business Bank through participating providers.


The current market yield on the bond is both the market rate of return to the debt investor and the pre-tax market cost to the issuer of debt capital.
It offered more attractive terms for both businesses applying for new facilities and lenders, with the aim of supporting the continued provision of finance to UK businesses during the Covid-19 outbreak.


Issuers of bonds include a wide range of corporate and public sector entities, including central governments.
The CBILS provided the lender with a UK government-backed guarantee against the outstanding facility balance, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’.  


The UK government also pays the first 12 months of interest payments, enabling businesses to benefit from lower initial repayments. The business remains liable for repayments of the capital.


2.  
The maximum value of a facility provided under the scheme was £5 million.


In trade finance, an instrument issued by a bank or an insurance company, in favour of a buyer, on behalf of a supplier, as additional assurance to the buyer that the supplier will perform its obligations under the supply contract. 


Such a bank bond or insurance company bond will be supported by an indemnity issued by the supplier in favour of the bank or insurance company.
CBILS supported a wide range of business finance products, including:


*Term facilities
*Overdrafts
*Invoice finance facilities
*Asset finance facilities


3.


A guarantee provided by one party to another.
To be eligible for support via CBILS, the small business must:


*Be UK based, with annual turnover of no more than £45 million.
*Operate within an eligible industrial sector.
*Be unable to meet a lender’s normal lending requirements for a fully commercial loan or other facility, but would be considered viable in the longer-term.


4.


An amount of money provided as security for a guarantee.
For new borrowings from April 2021 onward, CBILS is superseded by the Recovery Loan Scheme (RLS).




== See also ==
==See also==
* [[Agent bank]]
* [[Bounce Back Loan Scheme]]
* [[Bearer bond ]]
*[[British Business Bank]]
* [[Bond futures]]
*[[Business continuity plan]]
* [[Bond issue]]
*[[Contingency plan]]
* [[Bond mandate]]
*[[Coronavirus]]
* [[Bulldog bond]]
*[[Coronavirus Job Retention Scheme]]
* [[Callable bond]]
*[[Coronavirus Large Business Interruption Loan Scheme]]
* [[Catastrophe bond]]
*[[COVID-19 Corporate Financing Facility]]
* [[Clean price]]
*[[Disaster recovery planning]]
* [[CMO]]
*[[Financial stability]]
* [[Convertible bonds]]
*[[Liquidity management]]
* [[Corporate bond]]
* [[Recovery Loan Scheme]]
* [[Coupon bond]]
*[[Stranded middle]]
* [[Dirty price]]
* [[Drop-lock bond]]
* [[Eurobond]]
* [[Exchangeable bond]]
* [[Floating rate note]]
* [[Foreign bond]]
* [[Gilts]]
* [[Government paper]]
* [[Guarantee]]
* [[Indemnity]]
* [[Investment-grade bond]]
* [[Obligation]]
* [[On-demand bond]]
* [[Par bond]]
* [[Par yield]]
* [[Paying agent]]
* [[Performance bond]]
* [[Redeemable bond]]
* [[Security]]
* [[Shallow discount bond]]
* [[Short term]]
* [[Straight bond]]
* [[Yield to maturity]]


==Resources for COVID-19==
[https://www.treasurers.org/hub/technical/covid19 ACT technical - COVID-19]
[https://www.gov.uk/government/publications/guidance-to-employers-and-businesses-about-covid-19/covid-19-support-for-businesses UK government: support for businesses]
[https://www.gov.uk/coronavirus UK government: COVID-19 support hub]
[[Category:The_business_context]]
[[Category:Corporate_finance]]
[[Category:Investment]]
[[Category:Long_term_funding]]
[[Category:Long_term_funding]]
[[Category:Compliance_and_audit]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Treasury_operations_infrastructure]]

Revision as of 15:00, 19 August 2021

COVID-19 - business continuity - UK.

(CBILS).

The CBILS was provided by the UK government owned British Business Bank through participating providers.

It offered more attractive terms for both businesses applying for new facilities and lenders, with the aim of supporting the continued provision of finance to UK businesses during the Covid-19 outbreak.

The CBILS provided the lender with a UK government-backed guarantee against the outstanding facility balance, potentially enabling a ‘no’ credit decision from a lender to become a ‘yes’.

The UK government also pays the first 12 months of interest payments, enabling businesses to benefit from lower initial repayments. The business remains liable for repayments of the capital.

The maximum value of a facility provided under the scheme was £5 million.


CBILS supported a wide range of business finance products, including:

  • Term facilities
  • Overdrafts
  • Invoice finance facilities
  • Asset finance facilities


To be eligible for support via CBILS, the small business must:

  • Be UK based, with annual turnover of no more than £45 million.
  • Operate within an eligible industrial sector.
  • Be unable to meet a lender’s normal lending requirements for a fully commercial loan or other facility, but would be considered viable in the longer-term.


For new borrowings from April 2021 onward, CBILS is superseded by the Recovery Loan Scheme (RLS).


See also


Resources for COVID-19

ACT technical - COVID-19

UK government: support for businesses

UK government: COVID-19 support hub