Here, David Preece in our Corporate Team, reviews the latest measure announced for bigger businesses.
Does the Coronavirus Business Interruption Loan Scheme (CBILS) help all businesses?
The CBIS supports SMEs with access to loans, overdrafts and asset finance of up to £5m with the Government covering the first 12 months’ interest and lender fees. At the end of March, the Chancellor recognised that this was not helping larger firms and introduced a new scheme.
What is the Coronavirus Large Business Interruption Loan Scheme (CLBILS)?
This is a new scheme which gives banks a Government guarantee of 80% so that they can make loans of up to £25m to larger businesses which turnover between £45m and £500m a year.
It was introduced because banks were wary of lending to larger businesses which may be at risk of going under, leaving the loan unpaid.
Who is behind the new CLBILS?
It is a British Business Bank scheme but will be delivered by accredited lenders. There is currently a delay in some lenders being accredited by the BBB but businesses are being asked to contact their usual lender in the first instance.
When can we access the funds if we are approved for a loan?
The CLBILS scheme is now up and running and will close on March 31 2021, more information can be accessed here.
Is my businesses eligible for CLBILS?
You must be UK based, be unable to secure commercial funding through any other facility and have a turnover of between £45m and £500m. There are a number of other requirements, including having a viable plan for the borrowed funding. It is worth seeking professional advice before progressing as further details are expected in the coming weeks.