The Government has announced that it will extend the maximum loan size available through the Coronavirus Large Business Interruption Loan Scheme (CBILS) from £50 million to £200 million.
The maximum loan size increase will 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.
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.”
“Today we’re increasing the maximum loan to £200 million to make sure companies get the help they need.”
“Businesses have benefitted from over £32 billion in loans and guarantees to support their cashflow 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 Coronavirus Large Business Interruption Loan Scheme, alongside £18.7 billion through the CCFF.”
Companies borrowing more than £50 million through CLBILS 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.
These restrictions will also apply to CCFF participants that wish to borrow money beyond 12 months from today. This will ensure that the money is used to keep the company going through the crisis.
Stephen Jones, CEO of UK Finance, said “Ensuring businesses of all sizes access the financial support they need during these tough times is a common goal shared by Government, banks and regulators. The banking and finance industry welcomes HM Treasury’s reforms to CLBILS, extending the maximum loan size available from £50 million to £200 million to help support larger business affected by coronavirus alongside the Bank of England’s Coronavirus Corporate Financing Fund (CCFF).”
“Over the last seven weeks, the industry has worked tirelessly to get money to those viable businesses that need help with firms and sole traders of all shapes and sizes accessing billions of pounds in loans. These government-backed schemes are just one aspect of the range of measures available to businesses from the banking and finance sector. The extensive support includes working capital extensions, overdraft extensions, capital repayment holidays and asset-based finance, allowing businesses to access the right support that suits their needs. We stand ready to support many more customers in the weeks ahead.”