CORONAVIRUS LARGE BUSINESS INTERRUPTION LOAN SCHEME TO OPEN ON MONDAY
- Scheme targets businesses with a turnover of more than £45m
- Facilities available of up to £50m
The Chancellor of the Exchequer today announced details of the Coronavirus Large Business Interruption Loan Scheme (CLBILS).
Delivered by lenders accredited by the British Business Bank, the new scheme provides finance to mid-sized and larger UK businesses with turnover above £45m (the upper limit for the existing smaller-business focused CBILS).
CLBILS can help provide facilities of up to £25m for businesses with turnover from £45m up to £250m, and facilities of up to £50m for those businesses with a turnover of more than £250m who are suffering disruption to their cashflow due to lost or deferred revenues during the Covid-19 outbreak.
The new CLBILS scheme will support term loans, revolving credit facilities (including overdrafts), invoice finance and asset finance facilities. It is designed to give lenders greater confidence to provide funding by providing a partial guarantee of 80% of the outstanding facility balance.
- Up to £50m facilities: up to £50m for those with a turnover of over £250m, and of up to £25m for businesses with turnover from £45m up to £250m.
- 80% guarantee: The scheme provides the lender with a government-backed, partial guarantee (80%) against the outstanding facility balance.
- Finance terms: Finance terms are from three months to three years.
- Economic benefits go to the borrower: Borrowers will benefit from a proportionate reduction in pricing in return for lenders receiving capital and risk benefits.
- Personal guarantees: No personal guarantees are permitted for facilities under £250,000. For facilities of £250,000 and over, claims on personal guarantees cannot exceed 20% of losses after all other recoveries have been applied.
- The borrower always remains 100% liable for the debt.
Businesses from all sectors can apply for a facility.
- Applicants must be UK based in its business activity, with turnover of over £45m per year.
- They should have a borrowing proposal which, were it not for the current pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable the business to trade out of any short-to-medium term difficulty.
- The scheme is open to businesses who have not received a facility under the Bank of England’s Covid Corporate Financing Facility (CCFF).
Lender and Borrower are still free to enter into loan agreements outside of CLBILS e.g. where there is no economic benefit to the borrower of taking out a CLBILS loan over normal commercial lending.
How to apply
CLBILS will be available through a range of British Business Bank accredited lenders and partners, which will be listed on the British Business Bank website. Existing CBILS lenders can seek expedited accreditations to become Lenders under the CLBILS scheme. The Bank expects to accredit a number of existing CBILS lenders shortly and is publishing a request for proposals documents making the scheme available to new lenders.
Keith Morgan, Chief Executive, British Business Bank, said: “The new Coronavirus Large Business Interruption Loan Scheme focuses on a relatively narrow area of the market, but one that is vitally important to the UK economy. More finance for viable mid-sized and larger firms will help them protect jobs and be in a better position to resume normal business when the current pandemic subsides.”
Stephen Jones, CEO, UK Finance said: “Banks and finance providers are committed to helping British businesses through these difficult times. With over £1.1 billion already lent to small and medium-sized firms through the CBIL scheme the launch of the new scheme for larger business will help to expand this support during these challenging economic conditions.
“Frontline staff across the industry are working tirelessly to deliver money to viable businesses as quickly as possible and providers will be working throughout the weekend to get this scheme up and running for Monday.”
 The following are not eligible under CLBILS: credit institutions (falling within the remit of the Bank Recovery and Resolution Directive), building societies, insurers and reinsurers (but not insurance brokers), public-sector bodies, further-education establishments, if they are grant-funded, state-funded primary and secondary schools
British Business Bank
Notes to Editors
About the British Business Bank
The British Business Bank is the UK government’s economic development bank. Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively, enabling those businesses to prosper, grow and build UK economic activity. Its remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.
The British Business Bank programmes are supporting more than £7.2bn of finance to over 93,000 smaller businesses (as at end of September 2019).
As well as increasing both supply and diversity of finance for UK smaller businesses through its programmes, the Bank works to raise awareness of the finance options available to smaller businesses:
- The Business Finance Guide (published in partnership with the ICAEW and a further 21 business and finance organisations) impartially sets out the range of finance options available to businesses at all stages – from start-ups to SMEs and growing mid-sized companies. Businesses can take the interactive journey at thebusinessfinanceguide.co.uk.
- The new British Business Bank Finance Hub provides independent and impartial information to high-growth businesses about their finance options, featuring short films, expert guides, checklists and articles from finance providers to help make their application a success. The new site also features case studies and learnings from real businesses to guide businesses through the process of applying for growth finance.
As the holding company of the group operating under the trading name of British Business Bank, British Business Bank plc is wholly owned by HM Government and is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). The British Business Bank operates under its own brand name through a number of subsidiaries, none of which are authorised and regulated by the FCA.
British Business Bank plc and its principal operating subsidiaries are not banking institutions and do not operate as such. A complete legal structure chart for British Business Bank plc and its subsidiaries can be found on the British Business Bank plc website.