CBILS Refinancing Options: Can You Refinance Your CBILS Loan?

The Coronavirus Business Interruption Loan Scheme (CBILS) provided over 80,000 UK businesses with loans totalling more than £20 billion between 2020 and 2021. Unlike Bounce Back Loans — which carried a fixed 2.5% rate — CBILS rates were set by individual lenders. That means your rate could be anywhere from 3% to 15% depending on when you borrowed, from whom, and what your business looked like at the time.

Now that many CBILS loans are well into repayment, the question of whether to stay or switch is genuinely worth answering — particularly if your business has grown, your credit profile has improved, or rates have moved in your favour.

What was CBILS?

CBILS was a UK government scheme that ran from March 2020 to March 2021. It offered loans of up to £5 million to businesses with turnover under £45 million, with the government providing an 80% guarantee to lenders. Unlike BBLs, the guarantee was to the lender only — businesses were still personally liable for CBILS debt in most cases.

Key features of CBILS loans:

• Terms of up to 6 years (10 years for asset and invoice finance)
• The government paid the first 12 months of interest
• Interest rate set by the lender — typically 3–10% APR in 2020–21
• No equivalent to Pay As You Grow — no built-in flexibility mechanisms
• Lender could require personal guarantees on loans above £250,000

Are CBILS rates competitive in 2026?

Whether your CBILS rate is still competitive depends on what you were charged. The market has shifted considerably since 2020–21, and your business profile has almost certainly changed too.

As a guide, current market rates for equivalent secured or semi-secured business lending in 2026:

• Secured term loans (property): 5–8% APR
• Unsecured term loans (strong credit): 8–12% APR
• Growth Guarantee Scheme loans: Typically 7–12% APR
• Bank relationship loans: 5–9% APR for established customers

If your CBILS rate is above 10–12%, there is a reasonable chance you could do better today — especially if your business is now larger, more profitable, or has a longer trading history. Use our overpaying calculator to check your rate against current benchmarks.

Can you refinance a CBILS loan?

Yes — there is no government restriction on refinancing a CBILS loan. Unlike some schemes, CBILS does not have rules preventing you from repaying early and replacing with commercial finance. The constraints are practical, not regulatory:

• Early repayment charges on your existing loan (see below)
• Whether you can qualify for a competitive rate with your current lender or a new one
• Whether the total cost of switching — including fees, ERCs, and arrangement costs — is actually lower than staying on your existing loan

The process is straightforward: apply for a new loan, use the proceeds to repay the CBILS loan, and you're done. The new lender will typically require sight of your CBILS loan agreement and current statements.

The Growth Guarantee Scheme

If you're considering refinancing, the Growth Guarantee Scheme (GGS) is worth knowing about. It replaced the Recovery Loan Scheme in 2024 and is the current government-backed lending programme for UK businesses.

Key features of the Growth Guarantee Scheme:

• Loans from £25,001 to £2 million (term loans and overdrafts)
• Asset and invoice finance from £1,000
• Government guarantee of 70% to the lender
• Maximum term of 6 years
• Available to businesses with up to £45 million turnover
• Lender sets the rate — typically 7–12% APR in 2026

Early repayment charges on CBILS loans

This is the critical number you need before deciding anything. CBILS loans could carry early repayment charges (ERCs) — and they vary significantly by lender. Common structures:

• Percentage of outstanding balance: Typically 1–3% — the most common
• Months of interest: Usually 1–6 months, especially for longer-term loans
• Fixed fee: Less common; used by some challenger banks
• No ERC: Some CBILS lenders offered no-penalty early repayment, particularly in the early months of the scheme

Check your original loan agreement for the ERC terms. If you can't find them, call your lender and ask for a settlement figure — this will include any ERC and the outstanding capital. Use our exit penalty calculator to model whether the switch is worth it after these charges.

Worked example: Is refinancing your CBILS worth it?

A business took out a £150,000 CBILS loan in July 2020 at 9.5% APR over 5 years. It is now 2026 and has 24 months remaining. The outstanding balance is approximately £60,000. Their bank has offered to refinance at 7% APR over 24 months, with a 1% ERC on the CBILS loan and a £500 arrangement fee.

In this example the saving is modest — about £34 per month. Whether it's worth the administrative effort of refinancing depends on your circumstances. If your CBILS rate were 12%+ the picture would be significantly more compelling.

When to stay on your CBILS loan

Refinancing is not always the right move. Consider staying on your CBILS loan if:

• Your rate is already competitive. If you secured a CBILS loan at 4–6%, it is very unlikely you'll do better in today's market without significant security.
• You have less than 12 months remaining. The interest savings on a short remaining term are small, and the ERC and arrangement fee will eat most of any saving.
• Your ERC is large. A 3% ERC on a £200,000 balance is £6,000. You need a meaningful rate reduction and sufficient remaining term to recover that cost.
• Your credit profile hasn't improved. If your business is broadly in the same financial position as 2020–21, you may not qualify for a significantly lower rate — and the new lender may require additional security.

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