British Business Bank issues guidance ahead of refinancing wave

In response to enquiries regarding the refinancing of CBILS facilities to obtain an additional ‘BIP Period’, the British Business Bank have issued new borrower guidance.

The ‘BIP Period’ is the offer by the UK Government to cover payments for a period of 12-months from the initial drawdown date of the facility. The Bank has told lenders that they should not permit customers to refinance an existing CBILS facility for the primary purpose of a borrower obtaining a new 12-month BIP Period, as it is not within the spirit of the scheme.

The Bank outlined that lenders have a responsibility to ensure that their brokers or other third-party intermediaries are not marketing the scheme in this way.

Commenting on the Bank’s guidance, NACFB managing director Norman Chambers said: “Whilst the British Business Bank has placed the emphasis with lenders, intermediaries have a duty to advise their clients responsibly. Any CBILS refinancing should be undertaken for genuine distress purposes and not to take advantage of further interest free periods.”

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