21 Apr 2020

Chancellor expands loan scheme for large businesses

Chancellor expands loan scheme for large businesses

A UK government-backed loan scheme for large businesses affected by coronavirus has been expanded to cover all viable firms.

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

Business with turnovers of more than £500million 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 businesses, and the Bank of England Covid Corporate Financing Facility, for investment grade companies.

Mr 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 details

From the details released, here’s what we know:

  • All viable businesses with turnover of more than £45m will be able to apply for the UK Government-backed support;
  • Firms with turnover of more than £250 million can borrow up to £50 million from lenders; and
  • This complements existing support including the Covid Corporate Financing Facility and the Coronavirus Business Interruption Loan Scheme.

The UK Government will provide lenders with a guarantee of 80% on each loan to give lenders further confidence in continuing to provide finance.

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.

Support for businesses

Further details on eligibility for the scheme will be announced in due course.

In the meantime, Aberdein Considine’s Corporate & Business Advisory team can offer support in a number of ways, from helping you understand the scheme in more detail and keeping you updated as more details are announced.

We work with clients across a variety of industries and business sectors to provide a complete legal and business advisory service.

Click here if you would like to speak to us about these new schemes.

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