Coronavirus Large Business Interruption Loan Scheme (CLBILS)

What is it?

The Coronavirus Large Business Interruption Loan Scheme (CLBILS) will open on Monday 20 April 2020. It is designed to provide financial support to mid-sized and larger businesses across the UK that are losing revenue and seeing their cashflow disrupted, as a result of the COVID-19 outbreak.

Specifically, it facilitates access to finance for businesses with a turnover above £45 million, the upper limit for the existing smaller-business focused Coronavirus Business Interruption Loan Scheme (CBILS).

Who is eligible?

Your business must:

  • Be UK-based in its business activity
  • Have an annual turnover of more than £45 million
  • Have a borrowing proposal which the lender would consider viable, were it not for the COVID-19 pandemic, and believes will enable you to trade out of any short-term to medium-term difficulty
  • Self-certify that it has been adversely impacted by COVID-19
  • Not have received a facility under the Bank of England’s Covid Corporate Financing Facility (CCFF).

Lenders will need further information to confirm eligibility. All lending decisions remain fully delegated to the accredited lenders.

Businesses from any sector can apply, except the following:

  • Credit institutions (falling within the remit of the Bank Recovery and Resolution Directive), insurers and reinsurers (but not insurance brokers)
  • Building Societies
  • Public-sector bodies
  • Further-education establishments, if they are grant-funded
  • State-funded primary and secondary schools

Key features

Finance of up to £50 million

  • Finance of up to £25 million for firms with a turnover of more than £45 million.
  • Finance of up to £50 million for firms with a turnover of more than £250 million.

Finance terms

  • Repayment terms of three months to three years.
  • No personal guarantees are permitted for facilities under £250,000.
  • For facilities of £250,000 and over, personal guarantees cannot exceed 20% of losses after all other recoveries have been applied.

Guarantee to the lender to encourage lending

  • The scheme provides the lender with a government-backed partial guarantee (80%) against the outstanding balance of the finance.
  • The borrower remains 100% liable for the debt.

How to apply

  • The British Business Bank will operate the CLBILS via its accredited lenders. Further details will be made available. See the BBB website for details on steps how to apply and the list of lenders.
  • You should approach a lender yourself, ideally via the lender’s website. Note: There is high demand for CLBILS facilities. Phone lines are likely to be busy and branches may not be able to handle enquiries in person.
  • Not every accredited lender can provide every type of finance available under CLBILS, and the amount of finance offered varies between lenders. Please see the lenders’ websites for more information on the amounts they are able to offer.
  • The lender has the authority to decide whether to ofer you finance.
  • Under the scheme, lenders will not take personal guarantees of any form 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.
  • If one lender turns you down, you can still approach other lenders within the scheme

Lending Criteria and Viability

When you apply for a business loan, most lenders will ask you for the following:

Details of the loan

  • The amount you would like to borrow
  • What the money is for — the lender will check that it’s for a suitable business purpose and the right type of finance for your needs
  • The period over which you will make the repayments — the lender will assess whether the loan is affordable for you

Supporting documents

You will need to provide certain evidence to show that you can afford to repay the loan. This is likely to include:

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

The above requirements will vary from lender to lender. If you do not have everything listed here, a CLBILS loan could still be an option to provide finance to support your business.

Note: Lender and Borrower are still free to enter into loan agreements outside of CLBILS e.g. where there is no economic benefit to the borrower of taking out a CLBILS loan over normal commercial lending.

 

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