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Coronavirus: Large Business Interruption Loan Scheme

22 April 2020
The UK government has extended the coronavirus business interruption loan scheme to medium and large size businesses. In this article we outline some of the main features of the extended loan scheme.

Introduction

The coronavirus large business interruption loan scheme (the "Scheme") opened on 20 April 2020. 

The Scheme is part of a wider programme of UK government initiatives aimed to support UK businesses impacted by coronavirus (COVID-19).

The purpose of the Scheme is to help medium and large businesses access finance in order to overcome any short term funding gaps that may arise during the current crisis.

This Scheme is intended to give banks the confidence to lend into large businesses that are impacted by coronavirus in circumstances where they would otherwise be constrained from doing so.

Key features of the Scheme


Under the Scheme, the UK government will provide lenders with an 80% partial guarantee in respect of the balance outstanding of the loan.

Lenders can provide businesses with a turnover of:

  • more than £45 million per annum up to £25 million of finance; and/or
  • more than £250 million per annum up to £50 million of finance.

Borrowers will remain fully liable for the sum borrowed.

The Scheme will be made available through a series of accredited lenders, the details of which are listed on the British Business Bank website here >

Types of facilities covered by the Scheme

The Scheme includes (but is not limited to) the following types of credit facilities:

  • term loans;
  • revolving credit facilities (including overdrafts);
  • invoice finance; and
  • asset finance.

Businesses eligible to apply under the Scheme

The following eligibility criteria apply to borrowers seeking to avail of the Scheme:

  • the business must be based in the UK;
  • the relevant business must have an annual turnover of over £45 million;
  • self certification that the business has been adversely impacted by coronavirus; and
  • the relevant business has not received a facility under the Bank of England’s COVID-19 Corporate Financing Facility (CCFF).

In addition, it must be a proposal which the lender:

  • would consider viable, if not for the coronavirus pandemic; and
  • believes will enable the relevant business to trade out of any short-term to medium-term difficulty.

It is important to note that the decision to grant credit remains at all times with the relevant lender.

The following are ineligible for the Scheme:

  • 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.

If you would like any further information regarding the Scheme, please do not hesitate to get in touch with a member of the Banking team.

Further Resources:

Apply for the Coronavirus Large Business Interruption Loan Scheme

Coronavirus Large Business Interruption Loan Scheme (CLBILS)

Further Reading

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