- loans under the expanded scheme will be made available to
large businesses affected by coronavirus from next week
- changes also mean companies receiving help through CLBILS and
the Bank of England’s Coronavirus Corporate Financing Fund will
be asked to agree to not pay dividends and to exercise restraint
on senior pay
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 large
firms who 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.
, 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 who 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. The Bank will also publish a list of companies who have
benefitted under CCFF from the scheme on 4 June.
- borrowers under CLBILS will be able to borrow up to the lower
of 25% of turnover or £200 million
- 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
- Share buyback: Borrowers agree 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.
Further information on CLBILS can be found: https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/clbils/
Further information on CCFF can be found: https://www.bankofengland.co.uk/markets/covid-corporate-financing-facility
