20th April 2020A Guide to the Coronavirus Large Business Interruption Loan Scheme

20 April 2020

The Government’s Coronavirus Large Business Interruption Loan Scheme (CLBILS) launched officially on 20 April 2020. Originally announced by the Chancellor on 2 April, further details were released on 17 April expanding the loans to cover all viable firms. It aims to provide finance to UK mid-cap and larger enterprises during the Covid-19 outbreak.

The Scheme complements existing support including the Covid-19 Corporate Finance Facility and the Covid-19 Business Interruption Loan Scheme.

The Scheme will be provided by the British Business Bank through participating providers. Details of those participating lenders will be released in due course.

Key Aspects of the Scheme:

  • All businesses with turnover of more than million will be able to apply for government-backed support of up to million.
  • Firms with turnover of more than million can borrow up to million from lenders.
  • Originally businesses with over million were not eligible, but the scheme now covers these businesses too.
  • The Government will provide lenders with a guarantee of 80% on each loan.
  • The scheme will be available through a series of accredited lenders, which will be listed on the British Business Bank website.
  • No personal guarantees are required for facilities below .
  • For facilities above personal guarantees may be required, but claims cannot exceed 20% of losses after all other recoveries have been applied (given the 80% Government backed guarantee).
  • Finance terms of between 3 months and 3 years will be available.
  • Unlike CBILS (for smaller companies) there is no payment from Government to cover interest and fees in the first 12 months, however, the 80% guarantee does cover interest and fees as well as principle.

The following finance products will be included:

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

How much can a company borrow:

The amount borrowed should not be greater than:

  • Double the borrower’s annual wage bill for the most recent year available, or
  • 25% of the borrower’s total turnover for the most recent year available, or
  • With appropriate justification and based on self-certification of the borrower, the amount may be increased to cover their liquidity needs for the next 12 months.

In order to apply for access to the scheme the company must:

  • Be UK based, with annual turnover of over million per annum.
  • Operate within an eligible industrial sector (a small number of industrial sectors are not eligible for support).
  • Confirm that your business has not received a facility under the Bank of England’s Covid-19 Corporate Finance Facility.
  • Self-certify that your business has been adversely impacted by coronavirus.
  • Put forward a borrowing proposal which the lender would consider viable, if not for the coronavirus pandemic and which demonstrates how you plan to trade out of any short-term to medium-term difficulty.

In order to apply for finance the bank will require the following information:

  • Management accounts
  • Cash flow forecast
  • Business plan
  • Historic accounts
  • Details of assets

To apply for a CLBILS-backed facility, businesses may wish to consider approaching one or more participating lenders to discuss their borrowing needs.

The Scheme will open on 20 April 2020 and more guidance may follow.

20 April 2020.

These details are in accordance with Government guidelines on 17 April 2020.

The information contained in this guidance has been obtained from public sources and every attempt has been made to ensure its accuracy at the date of publication. In this ever-changing environment, this information is subject to change and we will not accept liability for losses arising from changes in the law or the interpretation thereof.

Key contacts

Contact us

We’d love to hear from you. To book an appointment or to find out more about our services: