Covid-19 Loan Scheme for Large Businesses Expanded
Business Round-Up – 20 April 2020
20/04/2020
Billion Pound Support Package for Innovative Firms Hit by Coronavirus
20/04/2020Covid-19 Loan Scheme for Large Businesses Expanded
A government-backed loan scheme for large businesses affected by Coronavirus has been expanded to cover all viable firms, the Chancellor Rishi Sunak has announced.
The Chancellor has unveiled the final details of Coronavirus Large Business Interruption Loan Scheme which will allow all viable businesses with turnover of more than £45m to be able to apply for government-backed support.
The Chancellor of the Exchequer, Rishi Sunak, said:
“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.
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.”
The government will provide lenders with a guarantee of 80% on each loan to give lenders further confidence in continuing to provide finance.
Firms with turnover of more than £250 million can borrow up to £50 million from lenders and this scheme complements the existing support available including the Covid Corporate Financing Facility and the Coronavirus Business Interruption Loan Scheme.
Outlining further details of the Coronavirus Large Business Interruption Loans Scheme (CLBILS), 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 government support.
The scheme will be available through a series of accredited lenders, which will be listed on the British Business Bank website.
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.
The government recognises many start up and early stage companies are facing challenges and are working with industry to assess these and consider further ways to offer support.
Here is a breakdown of the 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 |
The Business Secretary and the Economic Secretary to the Treasury will co-chair a meeting of the Business Finance Council today to discuss the progress so far of the CBILS, and provide an update on CLIBLS. It will also be attended by Small Business Minister Paul Scully and representatives from UK Finance, the Finance & Leasing Association, British Chambers of Commerce, Institute of Chartered Accounts of England and Wales, the Federation of Small Businesses, British Business Bank, Barclays UK, Bibby plc, CYBG, HSBC UK, Lloyds Banking Group, NatWest Group, Santander UK and Funding Circle. The Small Business Commissioner Philip King will also attend.
Government is also clarifying the position for firms owned by private equity, which will be able to access the guaranteed loan schemes.
