UPDATED: Growth Business has compiled a list of 20 CBILS lenders and what they will charge in interest once the one-year interest-free period ends.
Information has been supplied either by lenders themselves or what they have themselves published on their websites.
CBILS interest rates will vary from as low as 3 per cent for Calverton Finance and Cynergy Bank to anything between 10 per cent and nearly 15 per cent for Starling Bank.
Any bank is prohibited from charging interest over 14.99 per cent through the state-backed business interruption loan scheme.
Top 20 CBILS lenders and what they charge in interest
| Lender | Interest charged | What they offer |
|---|---|---|
| ART Business Loans | 12% | |
| Assetz Capital | 8.65% | |
| Bank of Scotland | <5% | Dedicated relationship manager to support your businesses / Regional and sector know-how as our highly experienced team is based right across the UK / Approval rate of over 90% means we’re able to support the success of most applicants |
| Calverton Finance | 3%-5% | Independent flexible financier / Fast decision making / Dedicated client portal |
| Conister | 11.62% | |
| Cynergy Bank | 3.1%-3.45% (residential investment) 3.85%-4.05% (commercial investment and commercial trading transactions) | |
| DSL Business Finance | 12% | |
| First Enterprise | 13.75% | |
| The FSE Group | 9% | |
| Growth Lending | 8-14% | |
| HSBC UK | 3.49%-3.99% | |
| JCB Finance | 2.39% | |
| Lloyds Bank | <5% | Dedicated relationship manager to support your businesses / Regional and sector know-how as our highly experienced team is based right across the UK / Approval rate of over 90% means we’re able to support the success of most applicants |
| RM Funds | 9% | Term Loans for businesses from £500,000 to £5m / Specialise in complex lending (non-bank situations) / Dedicated investment team |
| Social Investment Bank | 9% | |
| SWIG Finance | 12% | |
| Starling Bank | 10%-15% | |
| Thincats | 6%-9%, average 7.5% | Mid-sized SME funding specialist with loan sizes from £1m-£5m / Asset backed and cashflow lending suitable for asset-light businesses / More complex funding needs including growth capital and acquisitions |
| TriplePoint | 8%-9.25% |
One reason for the wide range of interest rates is that non-high street bank lenders cannot themselves borrow money from the Bank of England’s term funding scheme, which allows mainstream banks and building societies to borrow at close to the 0.1 per cent bank rate.
Another factor for specialist lenders is that many have raised third-party money – often at high interest rates – to be able to offer CBILS. Also, they have to pay advisers, brokers and lawyers involved in the transaction.
>See also: How to get your business out from under the COVID-19 debt mountain
For example, The Sunday Times reported that Merchant Money, which will charge interest at 13.56 per cent, itself borrowed £50m to enable it to lend through the CBILS. Merchant receives a return of 6 per cent after paying for its own borrowing and broker fees. “Banks, which have almost zero cost of funds, have a huge advantage over players like us,” Merchant Money CEO Luke Jooste told the newspaper.
Similarly, specialist lender ThinCats – which is backed through institutional investors including the BAE pension scheme and New York-based Waterfall Asset Management, has CBILS rtes of 6 per cent to 9 per cent, plus a 2 per cent arranging fee, because it does not have access to Bank of England zero-cost funding.
>See also: ThinCats to lend £400m to growth companies by end-2020
However, specialist lenders do give businesses which may have been turned down for a CBILS loan another avenue to try. The current rejection rate for all CBILS loan applications is 55 per cent.
So far, 77,909 loans worth £18.46bn have been provided through the CBILS.
Between April and June alone, the government paid £65.7m I interest to CBILS and bounce back loan scheme (BBLS) lenders. The average rate was 5.1 per cent.
Further reading
How do I apply for a Coronavirus Business Interruption Loan?
