Details of the Covid-19 Large Business Interruption Loan Scheme

17 Apr 2020

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On 16 April 2020, the Chancellor announced further details about the Coronavirus Large Business Interruption Loan Scheme (CLBILS) which is to be launched on Monday 20 April.

CLBILS is to be delivered by lenders accredited by the British Business Bank and can be accessed by businesses with a turnover of more than £45 million which are suffering disruptions to their cashflow due to lost or deferred revenues resulting from the Coronavirus pandemic.

CLBILS is designed to give lenders greater confidence in providing funding to larger businesses through the availability of a government guarantee of 80% against loans. It should be noted that the borrower will always remain 100% liable for the debt.

 

Eligibility

Full eligibility criteria are expected to be published shortly, however, in order to be eligible for the scheme, the borrower must:

  • Be UK based in its business activity.
  • Have >£45 million turnover per annum (on a group basis).
  • Operate within an eligible sector (ineligible sectors include: credit institutions, building societies, insurers and reinsurers (but not insurance brokers), public sector bodies, further education establishments (if they are grant funded) and state-funded primary and secondary schools).
  • 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.

Loan terms

Further clarity is expected to be published shortly, however we understand the key terms to be as follows:

  • Maximum facility of up to £25 million for businesses with a turnover of between £45 million and £250 million, and up to £50 million for businesses with a turnover of more than £250 million.
  • Interest will be set at the participating banks’ commercial rates.
  • The term of the loan will be between 3 months and 3 years.
  • No personal guarantees are permitted for facilities under £250,000. For facilities over £250,000, claims on personal guarantees cannot exceed 20% of the loan.

Qualifying finance products

  • Term loans
  • Revolving credit facilities (including overdrafts)
  • Invoice finance facilities
  • Asset finance facilities

Application process

At present, we understand that CLBILS will be available through a number of British Business Bank accredited lenders which will be listed on their website shortly. Existing CBILS lenders are expected to be able to seek expedited accreditations to become lenders under CLBILS and such accreditation is expected to be granted shortly.

How we can help

Please get in touch if you need to find out more about CLBILS and some practical guidance on what may be required from lenders in order to gain access to this key funding scheme.

Find out more about about our pre-lend services here

Note: the contents above are based upon latest information available at time of publication 17 April 2020 at 11am and subject to change as further details of the scheme are published.

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