The Coronavirus Large Business Interruption Loan Scheme (CLBILS) provides financial support to mid-sized and larger UK 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).

HOW IT WORKS

CLBILS is available through a range of British Business Bank accredited lenders and partners.

A lender can provide:

  • up to £25 million to businesses with turnover from £45 million up to £250 million
  • up to £50 million to businesses for those with a turnover of over £250 million

Finance is available in the form of:

  • term loans
  • revolving credit facilities (including overdrafts)
  • invoice finance
  • asset finance

CLBILS gives the lender a government-backed partial guarantee (80%) against the outstanding balance of the facility.

The borrower remains fully liable for the debt.

Under the scheme, personal guarantees of any form will not be taken 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.

KEY FEATURES OF THE SCHEME
  • The maximum value of a facility provided under the scheme is £50 million (£25 million for eligible businesses with a turnover under £250 million), available on repayment terms of up to three years.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.
  • FINANCE TERMS: From three months to three years.No personal guarantees are permitted for facilities under £250,000.
  • For facilities of £250,000 and over, claims on personal guarantees cannot exceed 20% of losses after all other recoveries have been applied.
HOW TO APPLY
1. APPROACH A LENDER

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.

2.  THE LENDER MAKES A DECISION

The lender has the authority to decide whether to offer 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.

3.  IF THE LENDER TURNS YOU DOWN

If one lender turns you down, you can still approach other lenders within the scheme.

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 current pandemic, and for which the lender believes the provision of finance will enable the business to trade out of any short-term to medium-term difficulty
  • Self-certify that it has been adversely impacted by the coronavirus (COVID-19)
  • Not have received a facility under the Bank of England’s COVID-19 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
WHAT LENDERS WILL NEED FROM YOU

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 the following:

  • 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.

To see the list of accredited LCBILS lenders, click HERE.