Further to our previous briefing, the Coronavirus Large Business Interruption Loan Scheme (CLBILS) has been launched this morning which will be welcome news for mid-market businesses. This briefing gives an overview of the details that have been released about the CLBILS so far and will be updated as further details are released.

Please note: this briefing summarises the position as of this morning, Monday 20 April 2020. Further details and guidance may be released after the date of the briefing. We will continue to provide updates as further information is released

What is the CLBILS?

As with the Coronavirus Business Interruption Loan Scheme (CBILS), the CLBILS provides lenders participating in the scheme with a Government-backed guarantee for 80 per cent. of the amount borrowed by an eligible business in order to make the decision to lend easier for the lender.  

Eligible businesses with a group turnover of up to £250 million will be able to borrow up to £25 million and those with a group turnover greater than £250 million will be able to borrow up to £50 million. In each case the amount borrowed should not be greater than (i) double the borrower’s annual wage bill for the most recent year available or (ii) 25 per cent of the borrower’s total turnover for the most recent year available or (iii) with appropriate justification and based on self-certification of the borrower, the amount may be increased to cover their liquidity needs for the next 12 months. 

Unlike the CBILS, there is no interest free period being offered under the CLBILS and the maximum repayment term is 3 years rather than 6 years.

Which businesses are eligible to apply for the CLBILS?

Businesses must meet the following criteria to be eligible to participate in the CLBILS:

• be UK-based in its business activity with a turnover of more than £45 million per annum
• 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 and
• have a borrowing proposal which the lender considers viable in the longer term (meaning that the lender believes the provision of the finance will enable the business to trade out of any short –to-medium term difficulties).

Businesses in the following sectors are not eligible to participate in the CLBILS: credit institutions, insurers and reinsurers (but not insurance brokers) and the public sector bodies (including further-education establishments, if they are grant-funded and state-funded primary and secondary schools)). 

How is the CLBILS accessed?

The CLBILS is provided directly by lenders who are accredited partners of the British Business Bank (these range from high street lenders to challenger banks to specialist lenders and details of those participating are to be published on the British Business Bank's website). It is important to note that the funding under the CLBILS is at the discretion of the lender approached to provide the required financing.