UP TO 10,000 UK companies which fell through the cracks of the government’s emergency coronavirus loan schems will benefit from last night’s shake-up by Chancellor Rishi Sunak, bank sources estimate.
The Treasury last night expanded the Coronavirus Large Business Interruption Loan Scheme (CLBILS) to bigger companies than before by removing caps on who is eligible and doubling loan sizes to up to £50 million. Market sources say 3,000 to 10,000 more companies will now become eligible for support.
The Government’s comprehensive aid package for business had been criticised for missing a large middle ground of firms. These were too big to apply for the CBILS fund but too small to apply for the CCFF scheme for the biggest companies with investment grade ratings.
The changes, which come into force on Monday, will now allow companies with more than £250 million of revenue to access loans of up to £50 million. Firms with between £45 million and £250 million can get a £25 million loan.
Under previous rules companies earning more than £500 million could not apply and the maximum loan on offer was £25 million.
The Coronavirus Business Interruption Loans Schemes (CBILS) — different from CLBILS — aims to help five million SMEs across the country who have turnover under the £45 million threshold.
The CLBILS expansion is significant for the private equity industry. Lenders were treating any PE-backed firm as a subsidiary of a larger group rather than a separate company in its own right, meaning many could not apply for a loan.
