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Coronavirus Large Business Interruption Loan Scheme (for businesses with turnover between £45m and £500m)

What is it?

The new Coronavirus Large Business Interruption Loan Scheme (CLBILS) will provide a government guarantee of 80% to enable banks to make loans of up to £200m to firms with an annual turnover of between £45m and £500m. This will give banks the confidence to lend to many more businesses which are impacted by coronavirus. Facilities backed by a guarantee under CLBILS will be offered at commercial rates of interest.

We expect the scheme to be delivered through commercial lenders. The Government will provide lenders with an 80% guarantee on individual loans for businesses that would be otherwise unable to access the finance they need

Lenders will still be expected to conduct their usual credit risk checks, but this scheme allows them to specifically support business that were viable before the COVID-19 outbreak but are facing significant cash flow difficulties, that would otherwise make their business unviable in the short term.

The new scheme will launch later this month and will support a wide range of businesses to access finance products including short term loans, overdrafts, invoice finance and asset finance.

Businesses would remain responsible for repaying any facility they may takeout.

Am I eligible?

This scheme will provide government guarantees of 80% to enable banks to make loans of up to £200m, offered to firms with a turnover of between £45m and £500m per annum that have been impacted by Covid-19 who are unable to secure regular commercial financing.

To be eligible, your business must:

1. Be UK-based in its business activity

2. Have an annual turnover between £45 million and £500 million

3. Be unable to secure regular commercial financing

4. Have a borrowing proposal which the lender:

a) would consider viable, were it not for the COVID-19 pandemic

b) believes will enable you to trade out of any short-term to medium-term difficulty

Businesses from any sector can apply, except the following:

  • Banks and building societies
  • Insurers and reinsurers (but not insurance brokers)
  • Public-sector organisations, including state-funded primary and secondary schools

Further detail on eligibility will be confirmed later this month.

How do I access it?

There are 12 lenders taking part in the scheme including all the main retail banks. You should approach a suitable lender yourself via the lender’s website.

You’ll need to tell the lender:

  • the amount you’d like to borrow
  • what the money is for
  • how long you’d like to pay it back

Supporting documents

You’ll need to provide documents that show you can afford to repay the loan.

These may include:

  • management accounts
  • cash flow forecast
  • business plan
  • historic accounts
  • details of assets

The documents you need will depend on the lender. A loan could still be an option even if you do not have everything listed here.

The lender will check that the loan is:

  • for a suitable business purpose
  • affordable for you
  • the right type of finance for your needs

The lender will decide whether to offer you a loan or another type of finance. Your business will be responsible for repaying 100% of the amount you borrow.

This information is taken from the government’s business support website. Follow this link for government guidance on this scheme >>>

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