On 2 April 2020, the Chancellor announced new financial support package, called the Coronavirus Large Business Interruption Loan Scheme (CLBILS) aimed at medium-sized and larger businesses across the UK. The scheme complements the existing package of government support for UK businesses that are facing cashlow issues and revenue loss as a result of the COVID-19 outbreak, including the Covid Corporate Financing Facility (CCFF) and the Coronavirus Business Interruption Loan Scheme (CBILS). CLBILS is therefore essentially similar to its forerunner CBILS but aimed at larger businesses.The new initiative is aimed at the "squeezed middle", meaning some companies that did not fit into the eligibility criteria for the existing schemes. It will allow companies with turnover of between £45m and £500m to borrow up to £25m, largely guaranteed by the State.
1. What funding is available under CLBILS?
Under CLBILS, an authorised lender can provide:
- up to £25m to businesses with turnover from £45m up to £250m; or
- up to £50m to businesses for those with a turnover of more than £250m.
Finance is available in the form of:
- term loans;
- revolving credit facilities (including overdrafts);
- invoice finance; or
- asset finance.
2. Which businesses are eligible?
CLBILS will be available to businesses that:
- are based in the UK;
- have an annual turnover of over £45 million;
- have self-certified that their business has been adversely impacted by Coronavirus;
- have not received a facility under the Bank of England’s COVID-19 Corporate Financing Facility; and
- have a borrowing proposal which the lender:
o would consider viable, if not for the coronavirus pandemic, and
o believes will enable the business to trade out of any short-term to medium-term difficulty.
The following businesses are not eligible to apply:
- credit institutions, insurers and reinsurers (but not insurance brokers);
- building societies;
- public-sector bodies;
- further-education establishments, if they are grant-funded; and
- state-funded primary and secondary schools
3. Will personal guarantees be required?
Under the scheme, personal guarantees of any form will not be required for facilities below £250,000.
For facilities above £250,000, personal guarantees may still be required, but claims cannot exceed 20% of losses after all other recoveries have been applied.
4. How can I apply?
CLBILS was launched on Monday 20 April 2020 by the British Business Bank. Businesses should apply directly to the accredited lenders under the scheme. A list of the accredited lenders can be found on the British Business Bank website.
5. I have been awarded De Minimis aid in the past, can I still benefit from the scheme?
Yes, any previous De Minimis state aid does not impact eligibility for CLBILS and does not need to be taken into account by the lender. CLBILS operates as a notified scheme rather than under De Minimis.
6. I am receiving other kinds of aid to help respond to COVID-19, can I still benefit from CLBILS?
The eligibility criteria for CLBILS does not require authorised lenders to take into account the other forms of Government support that businesses may be benefiting from e.g. the Coronavirus Job Retention Scheme, business rate reliefs or grants unrelated to the CLBILS scheme.
The only exception to this is that companies may not utilise both CLBILS and the Bank of England’s Covid Corporate Financing Facility.
7. How large is CLBILS?
The total funding offered under the scheme has yet to be announced and is expected to depend upon demand. On 18 March, the Chancellor confirmed that he would “do whatever it takes” to get businesses through the current epidemic.
For further information please contact one of our experts.
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