Final Details of Coronavirus Large Business Interruption Loan Scheme Unveiled

Final Details of Coronavirus Large Business Interruption Loan Scheme Unveiled

This scheme helps large businesses affected by coronavirus (COVID-19) to access loans of up to £25 million.

A UK government-backed loan scheme for large businesses affected by coronavirus has been expanded to cover all viable firms, Chancellor of the Exchequer Rishi Sunak announced today.

This scheme allows lenders to support businesses that were viable before the coronavirus outbreak but now face significant cash flow difficulties that would otherwise make their business unviable in the short term.

Outlining further details of the Coronavirus Large Business Interruption Loans Scheme (CLBILS) ahead of its launch on Monday, Rishi Sunak said all firms with a turnover of more than £45 million will now be able to apply for up to £25 million of finance, and up to £50 million for firms with a turnover of more than £250 million.

Business with turnovers of more than £500 million were originally not eligible for the scheme, which is being set up to help firms who do not qualify for the existing Coronavirus Business Interruption Loan Scheme – for small and medium sized businesses – and the Bank of England Covid Corporate Financing Facility – for investment grade companies.

The move, which comes after extensive consultation with businesses, will ensure even more firms are able to benefit from UK Government support. “I want to ensure that no viable business slips through our safety net of support as we help protect jobs and the economy, that is why we are expanding this generous scheme for larger firms,” the Chancellor said. “This is a national effort and we’ll continue to work with the financial services sector to ensure that our £330 billion of government support, through loans and guarantees, reaches as many businesses in need as possible.”

This support complements the unprecedented help available for businesses large and small, including CBILS, CCCFF, tax deferrals, the Coronavirus Job Retention Scheme, cash grants for small businesses, and covering the cost of statutory sick pay. “Coronavirus has struck a heavy blow against businesses of all sizes across the UK,” the Business Secretary, Alok Sharma, said. “Expanding this scheme will provide larger firms with the support they need during the pandemic, helping to provide job security to thousands of people and protect our economy.”

The CLBILS is available through a series of accredited lenders, which are listed on the British Business Bank website. The government provides lenders with an 80% guarantee on individual loans. This gives banks the confidence to lend to many more businesses which are impacted by coronavirus.

Facilities backed by a guarantee under CLBILS are offered at commercial rates of interest.

Support available:

Firm size Turnover < £45m Turnover > £45m Investment grade
Coronavirus Business Interruption Loan Scheme

x

Coronavirus Large Business Interruption Loan Scheme

x

x

Covid Corporate Financing Facility

x

Eligibility

You’re eligible for CLBILS if:

  • your business is based in the UK
  • your business has an annual turnover of over £45 million
  • you can self-certify that your business has been adversely impacted by coronavirus
  • your business has not received a facility under the Bank of England’s COVID-19 Corporate Financing Facility

You must also have a borrowing proposal which the lender:

  • would consider viable, if not for the coronavirus pandemic
  • believes will enable you to trade out of any short-term to medium-term difficulty

Businesses with a turnover of less than £45 million may be entitled to other government support.

Exceptions

The following businesses are not eligible to apply:

  • banks, insurers and reinsurers (but not insurance brokers)
  • building societies
  • public-sector bodies
  • further-education establishments, if they are grant-funded
  • state-funded primary and secondary schools

How to apply

The full rules of the scheme and guidance on how to apply is available on the British Business Bank website.

You can apply for CLBILS here.

Image: Ivan Traimak / Adobe Stock

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Sebastien Fontenoy holds an MBA degree and writes about entrepreneurship, startups and finance.