Companies with annual revenues of more than £45m will from Monday be able to access a new UK Government backed loans scheme.
Chancellor Rishi Sunak said companies can apply for the loans from lenders accredited through the Coronavirus Large Business Interruption Loan Scheme (CLBILS).
Like the already established Coronavirus Business Interruption Loan Scheme (CBILS), which provides finance up to £5m to SMEs, the fund will be administered by the UK Government’s economic development bank, the British Business Bank.
CBILS, with finance provided by more than 40 accredited lenders, including all the high street banks, has already provided funding of just over £1bn to SMEs across the UK. The funding under CBILS is for firms with annual revenues of up to £45m.
CLBILS is being targeted at mid-sized and larger firms. Companies with annual revenues between £45m and £250m can apply for the short-term loans and financial support of up to £25m if they have been forced to shut down operations or been impacted by the virus shutdown. Larger businesses with sales of more than £250m can also take apply for finance up to £50m
However, if they access CLBILS they will be unable to use the Bank of England’s Covid Corporate Financing Facility (CCFF), which EasyJet and Greggs have both borrowed from.
Mr Sunak, said: “I want to ensure that no viable business slips through our safety net of support as we help protect jobs and the economy. That is why we are expanding this generous scheme for larger firms.
“This is a national effort and we’ll continue to work with the financial services sector to ensure that our £330 billion of government support, through loans and guarantees, reaches as many businesses in need as possible.”
Business Secretary Alok Sharma added: “Coronavirus has struck a heavy blow against businesses of all sizes across the UK.
“Expanding this scheme will provide larger firms with the support they need during the pandemic, helping to provide job security to thousands of people and protect our economy.”
With the lockdown extension stretching for another three weeks at least, businesses are keen to ensure they can remain solvent until the economy can return to normal.
The UK Government said the new loans would be 80% guaranteed by the state and explained banks must not ask for personal guarantees on any loans under £250,000.
For anything above, the government said: “claims on personal guarantees cannot exceed 20% of losses after all other recoveries have been applied.”
Both loan schemes are available to firms in Wales, where the Welsh Government, through the Development Bank of Wales, also has a Covid-19 £100m support fund, which was oversubscribed in its first week with 1,500 applications.
Keith Morgan, chief executive of British Business Bank, said: “The new Coronavirus Large Business Interruption Loan Scheme focuses on a relatively narrow area of the market, but one that is vitally important to the UK economy.
“More finance for viable mid-sized and larger firms will help them protect jobs and be in a better position to resume normal business when the current pandemic subsides.”
Secretary of State for Wales, Simon Hart, said: “We are completely committed to protecting businesses of all sizes during this emergency. By expanding this scheme to cover even more businesses, we are ensuring that as many companies as possible across the UK can access the support they need.
“The UK Government will continue to do whatever it takes to help all those who need it. The £330bn of UK Government support for businesses small and large will help us to get through this emergency together, protecting jobs and the economy while we work to tackle the coronavirus.”