The Government has announced it will increase the maximum loan size available through the Coronavirus Large Business Interruption Loan Scheme (CLBILS) from £50 million to £200 million as of next week.
The increase aims to help ensure those large firms which do not qualify for the Bank of England's COVID Corporate Financing Facility (CCFF) have enough finance to meet cash flow needs during the outbreak.
Businesses have benefitted from over £32 billion in loans and guarantees to support their cash flow during the crisis. This includes 268,000 Bounce Back Loans worth £8.3 billion, 36,000 loans worth over £6 billion through the Coronavirus Business Interruption Loan Scheme, and £359 million through the CLBILS, alongside £18.7 billion through the CCFF.
Borrowers under CLBILS will soon be able to borrow up to 25% of turnover, up to a maximum of £200 million. Lenders wishing to offer larger loans will need to undergo further accreditation checks. Companies borrowing more than £50 million will be subject to restrictions on dividend payments, senior pay and share buy-backs during the period of the loan, including a ban on dividend payments and cash bonuses, except where they were previously agreed.
John Glen, the Economic Secretary to the Treasury, said:
'We're determined to support businesses of all sizes throughout this crisis and our loans and guarantees have already provided over £32 billion to thousands of firms.
'... we're increasing the maximum loan to £200 million to make sure companies get the help they need.'
The expanded loans, which have been introduced following discussions with lenders and business groups, will be available from 26 May 2020.
How To Apply
The scheme launched on Monday 20 April 2020. It will be available through a range of accredited lenders, which will be listed on the British Business Bank website.
There is likely to be a big demand for facilities, so businesses should consider applying via the lender’s website in the first instance. Telephone lines are likely to be busy and branches may have limited capacity to handle enquiries due to social distancing.