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Coronavirus Large Business Interruption Loan Scheme: filling the lending gap for medium and large businesses

Posted: 20/04/2020

This article forms part of our coronavirus resource hub and, in particular, develops on a series of articles relevant to the Coronavirus Business Interruption Loan Scheme (CBILS).

On 16 April, the Chancellor unveiled the latest details on the Coronavirus Large Business Interruption Loan Scheme (CLBILS), which launches today. CLBILS provides medium and large sized businesses affected by the Covid-19 outbreak with access to finance. The key features include:

Finance of up to £50 million

CLBILS is delivered by the British Business Bank under which accredited lenders will be able to provide:

  • up to £25 million to businesses with turnover of between £45 million and £250 million; and
  • up to £50 million to businesses with turnover over £250 million.

It is important to note that the amount borrowed should not be greater than:

  • double the borrower’s annual wage bill for the most recent year available; or
  • 25% of the borrower’s total turnover for the most recent year available,

but 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.

Finance is available in the form of term loans, revolving credit facilities (including overdrafts), invoice finance and asset finance with repayment terms between three months to three years.


CLBILS provides the lender with a government-backed guarantee of 80% against the outstanding balance of the finance. The borrower remains 100% liable for the debt. Unlike CBILS, the current guidance suggests that interest payments or lender-levied fees will not be covered by the Government.


Reflective of the revised requirements under CBILS, no personal guarantees are permitted for facilities under £250,000. For facilities over £250,000, claims on personal guarantees cannot exceed 20% of losses after all recoveries have been applied. Notably, unlike CBILS, the current guidelines do not prohibit the use of a principal private residence to support a personal guarantee of a CLBILS facility.


To be eligible a business must:

  • not be excluded (such as credit institutions, insurers, building societies);
  • 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 Covid-19; and
  • not have received a facility under the Bank of England’s Covid Corporate Financing Facility (CCFF).

How to apply

The process to apply is very similar to that of a facility under CBILS as set out in our previous article. In brief, a business should approach a lender (preferably through its website) to discuss a facility. Businesses should prepare details of the loan (amount, purpose and period for repayment) and begin to gather the evidence likely to be required by a lender such as:

  • management accounts;
  • cash flow forecast;
  • business plan;
  • historic accounts;
  • details of assets.

It is envisaged that businesses will look to their existing finance providers for funding relying on their existing relationship. However, not all lenders offer all finance options and some may be limited. Businesses will need to consider all lender opportunities available. A list of accredited lenders will be published on the British Business Bank website.

Future thoughts

CLBILS is an entirely distinct measure to support mid-sized and large businesses but, in order to release urgent funding, guidance suggests the infrastructure and delivery mechanisms used to support CBILS will be adopted. CBILS, as reported in our previous articles, did suffer from shortcomings, which fettered its ability to help small to medium sized businesses.

CLBILS has the benefit of hindsight and, albeit on a larger scale, the scheme may hit the ground running, unlike its junior counterpart. It is certainly expected that interest in CLBILS will be high. We may see that the £1.3 billion from 6,020 loans under CBILS, as at 13 April, is quickly surpassed. This may be even more likely considering “lockdown” has been extended and businesses that weathered the storm of the first three weeks may now be in need of urgent cash.

Whether CLBILS will be successful in its mandate for filling the gap between CBILS and the CCFF, time will tell. Considering the teething issues apparent in other schemes, we do expect guidelines will shift to reflect industry approach and lender appetite over the coming weeks.

The team at Penningtons Manches Cooper is available to help businesses navigate this measure and advise on the preparation of the critical loan agreements.

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