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CLBILS
•May 20, 2020•

Borrowing limit to be increased for the Coronavirus Large Business Interruption Loan Scheme

Borrowing limit to be increased for the Coronavirus Large Business Interruption Loan Scheme

Key Contact: Christian Farrow

Author: Chris Doherty

The Government has announced proposals to extend the Coronavirus Large Business Interruption Loan Scheme (CLBILS) by raising the borrowing limit. Currently, eligible businesses with turnover of more than £45 million per year can apply for up to £25 million of finance. Firms with a turnover of more than £250 million can apply for up to £50 million. Under the extended scheme, firms will be able to borrow up to 25% of their turnover to a limit of £200 million.

The expanded scheme will be made available from Tuesday 26 May 2020.

Full scheme details can be found on our Financial Support Guide for Businesses.

Companies that borrow over £50 million under the extended CLBIS scheme will be banned from making any dividend payments other than those that have already been declared, and must agree not to carry out any share buybacks until their loan has been repaid. Cash bonuses, and pay rises to senior management (including the board) will also be banned for that period except where they:

  1. were declared before the loan was taken out;
  2. are in keeping with similar payments made in the preceding 12 months; and
  3. do not have a material negative impact on the borrower’s ability to repay the loan.

Government publishes COVID-19 support scheme figures

The Government has provided figures on the uptake of funding under the Treasury’s various Coronavirus support schemes.

The Bounce Back Loan Scheme, which offers loans of up to £50,000 to small and medium sized businesses, has been particularly popular – 464,393 loans worth £14.18 billion have already been approved.

Uptake for the Coronavirus Business Interruption Loan Scheme (CBILS) and the CLBILS has been more tentative, with 40,564 CBILS loans worth £7.25 billion and 86 CLBILS loans worth £0.59 billion having been approved so far.

8 million jobs have now been furloughed under the Coronavirus Job Retention Scheme, with £11.1 billion having been claimed by employers. 2 million Self-employment Income Support claims have also been made, worth £6.1 billion.

For more information on any of the points raised, please contact our corporate team.

•April 20, 2020•

COVID-19 SUPPORT: Daily Update – Monday 20 April 2020

COVID-19 SUPPORT: Daily Update – Monday 20 April 2020

Key Contact: Christian Farrow

Author: Elena Visser

A new £1.25 billion package has been revealed today to help support start-ups in the UK

The government has revealed today that it will invest in some of the most innovative start-ups to help them survive in a scheme that will launch in May. Start-ups had been calling for more support after France and Germany had offered similar schemes to bolster their own local start-ups.

The package includes a £500 million investment fund, known as the ‘Future Fund’ for high growth companies hit by the crisis with their venture capital backers, and will provide UK based companies with loans of between £125,000 and £5 million. Private sector money will be matched with state backed loans that can convert into equity stakes (valued at a discount if not repaid). These convertible loans may be a suitable option for businesses that rely on equity investment and are unable to access the Coronavirus Business Interruption Loan Scheme.

To be eligible, a business must be unlisted, UK registered, must be able to attract the equivalent match funding from third party private investors and institutions, and also have previously raised at least £250,000 in equity investment over the last five years. Full eligibility criteria are due to be published in due course.

In addition, £750 million will be made available through grants and loans from Innovate UK, the national innovation agency, with the first payments to be made by mid-May.

Although full details of the scheme are yet to be announced, the initial information about the scheme can be found here.

The Coronavirus Large Business Interruption Scheme (CLBILS) launches today for large businesses

This scheme aims to support large businesses with an annual turnover of over £45 million and all viable businesses will be able to apply for up to £25 million of finance. Firms with a turnover over more than £250 million will be able to apply for up to £50 million of finance.

The scheme will be available through a series of accredited lenders listed on the British Bank website. The UK government will provide lenders with an 80% guarantee on individual loans. Facilities backed by a guarantee under CLBILS will be offered at commercial rates of interest.

Eligibility criteria include being UK based, being able to self certify that your business has been adversely affected by coronavirus and not receiving a facility under the Bank of England’s COVID-19 Corporate Financing Facility.

Please visit the British Bank website for further information which can be found here.

The Welsh Government has released an additional £100 million to support businesses

A further £100 million has been released due to unprecedented demand for support under the Welsh Economic Resilience Fund. More than 6,000 grant applications from small and medium sized businesses and social enterprises were received within 24 hours of the launch on Friday.

The Economic Resilience Fund aims to complement and fill the gaps left by the UK government schemes such as the Job Retention Scheme, with grants of up to £10,000 for micro-enterprises and up to £100,000 for SMEs.

The additional £100 million now takes the Economic Resilience Fund up to £300 million and will supplement the latest phase of support, providing non-repayable grants to microbusinesses, SMEs and those large businesses of critical, social or economic importance to Wales.

The Welsh government’s announcement can be found here.

Please see our daily updated Financial Support Guide for Businesses for further information-  COVID-19 FINANCIAL SUPPORT FOR BUSINESSES

For more information on any of the points raised, please contact our corporate team.