The Government has announced an increase in the maximum amount that larger businesses can borrow under the Coronavirus Large Business Interruption Loan Scheme (CLBILS) from £50 million to £200 million.
CLBILS loans are offered on normal commercial terms, but are backed by a Government guarantee worth 80 per cent of the amount borrowed. They can be accessed through the 12 accredited lenders for the scheme by the British Business Bank.
The increase will come into effect from Tuesday 26 May 2020 and will mean that larger businesses can borrow up to 25 per cent of turnover, subject to a maximum of £200 million.
At the same time, the Government has introduced restrictions on dividends, share buybacks and executive pay for firms benefiting from CLBILS loans of more than £50 million.
The restrictions will also apply to large businesses accessing the Bank of England’s Covid Corporate Financing Facility (CCFF).
More details about these restrictions are expected to be set out by the British Business Bank on 26 May 2020.
Smailes Goldie Group
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