Treasury extends CLBILS loan size to £200m as total support hits £32bn
The Treasury is extending the CLBILS loan size to £200m after announcing more than £32bn in loans and guarantees have been awarded to UK firms.
Chancellor Rishi Sunak today announced that businesses have benefitted from over £32bn in loans and guarantees to support them during the coronavirus crisis.
With lockdown restrictions limiting business, Sunak introduced a series of government support schemes to help firms in financial difficulties.
Among them is the Coronavirus Large Business Interruption Loan Scheme (CLBILS), which provides finance to mid-sized and larger UK businesses with a group turnover of more than £45m. The maximum amount available through CLBILS to a borrower and has today increased from £50m to £200m.
Sunak also introduced the Coronavirus Business Interruption Loan Scheme (CBILS), which sees the government underwrite 80 per cent of the value of a loan. However, the scheme has been riddled with issues with businesses complaining the process is onerous and time-consuming.
Lending data from last week shows lenders have only approved 50 per cent of applications through CBILS, even as overall lending rose above £20bn.
There has been praise for the bounce back loan scheme, which allows small business to receive a loan worth a quarter of their turnover, but only up to £50,000.
As part of the changes announced, companies receiving help through CLBILS and the Bank of England’s Coronavirus Corporate Financing Fund (CCFF) will be asked to agree to not pay dividends and “exercise restraint on senior pay”.
The expanded loans under CLBILS is to help firms which do not qualify for CCFF meet cashflow needs during the pandemic. CCFF requires firms to be investment grade rated.
John Glen, the economic secretary to the Treasury, said: “We’re determined to support businesses of all sizes throughout this crisis and our loans and guarantees have already provided over £32bn to thousands of firms.”
The Treasury said the £32bn includes 268,000 bounce back loans worth £8.3bn, 36,000 loans worth over £6bn through CBILS. The CLBILS has granted £359m, alongside £18.7bn through the CCFF.
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