Larger Businesses To Benefit From Loans Of Up To £200 Million
Businesses will be able to benefit from larger loans under the Coronavirus Large Business Interruption Loan Scheme (CLBILS), the government announced today.
The maximum loan size available under the scheme will be increased from £50 million to £200 million, 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 cashflow needs during the outbreak.
The expanded loans, which have been introduced following discussions with lenders and business groups, will be available from 26 May.
- Borrowers under CLBILS will be able to borrow up to 25% of turnover, up to a maximum of £200 million; and
- Lenders who wish to offer larger loans will need to undergo further accreditation checks.
The restrictions in place will include:
- Dividends: Borrowers cannot make any dividend payments other than those that have already been declared;
- Share buyback: Borrowers agree not to make any share buybacks;
- Executive pay: Borrowers cannot pay any cash bonuses, or award any pay rises to senior management (including the board) except where they were:
- a) declared before the CLBILS loan was taken out;
- b) is in keeping with similar payments made in the preceding 12 months; and
- c) does not have a material negative impact on the borrower’s ability to repay the loan.
Commenting on the extension of the CLBILS scheme, Dr Liz Cameron OBE, Chief Executive of the Scottish Chambers of Commerce said:
“This is welcome news. The Treasury has continued to listen to the concerns of business and is making sensible changes to business support schemes.
These vital changes will make a real difference to companies, in particular larger firms.
Access to finance is a priority for businesses of all sizes and the changes to this scheme, coupled with the other lending support schemes available will make sure that companies get the help they need to see them through this economic crisis.”