To support the large businesses that were viable before the coronavirus outbreak but now face significant cash flow difficulties, the government has introduced, temporary Coronavirus Large Business Interruption Loan Scheme (CLBILS).
Eligibility for CLBILS
Following businesses will be eligible for applying for finance facility under the scheme of CLBILS:
- the UK based business
- Annual turnover of over £45 million
- Businesses that have been adversely impacted by coronavirus. (This needs to be self- certified.)
- Businesses that are unable to secure facility under the Bank of England’s COVID Corporate Financing Facility.
Such businesses should have a borrowing proposal for the lender:
- To consider viable, if not for the coronavirus pandemic.
- To believe that it will enable you to trade out of any short-term to medium-term difficulty.
The following businesses are not eligible to apply for the loan under this scheme:
- Banks, insurers and reinsurers (but not insurance brokers)
- Building societies
- Public-sector bodies
- State-funded primary and secondary schools
Features of CLBILS
- Interest rate: The finance facility available under this scheme shall be offered at the commercial rate of interest.
- Guarantee: This facility is backed by a partial guarantee of 80% by the government. (However, the borrower remains 100% liable for the debt notwithstanding the 80% government guarantee).
- Form of facility: Finance under CLBILS is available in the form of term loans, revolving credit facilities (including overdrafts), invoice finance, asset finance.
- The maximum amount of loan: This shall depend on the turnover figure of the business:
- If the turnover is more than £45 million up to £250 million per year then the business can apply for up to £25 million of finance.
- If the turnover is more than £250 million per year then the business can apply for up to £50 million of finance
- Finance term: The finance under this scheme shall be available for a period from 3 months to up to 3 years depending on the business’ needs.
How to apply for Coronavirus Large Business Interruption Loan Scheme (CLBILS)?
The facility to apply for the loan is now available on Bank of England’s website. Click here to know the full rules of the scheme and guidance on how to apply thereunder. The businesses can apply for finance under the scheme through a series of accredited lenders, which are listed on the British Business Bank website.