New government guaranteed loan program for midsize businesses launched
Medium and large companies with turnover of over £ 45million will be allowed access to financing through a new government program from Monday, according to the British Business Bank.
Chancellor Rishi Sunak said businesses can apply for loans from lenders accredited by the banking group, through the Coronavirus Large Business Interruption Loan Scheme (CLBILS).
Bosses with sales between £ 45million and £ 250million can apply for short-term loans and financial support of up to £ 25million if they have been forced to shut down or have been affected by the virus shutdown.
Large companies with a turnover of over £ 250million are also eligible for the aid.
However, if they gain access to CLBILS, they will not be able to use the Bank of England’s Covid Corporate Finance Facility (CCFF), which both EasyJet and Greggs have borrowed from.
Mr. Sunak said, “I want to make sure that no viable business slips through our backstop of support as we help protect jobs and the economy. That is why we are expanding this generous program for large companies.
“This is a national effort and we will continue to work with the financial services industry to ensure that our £ 330 billion government support, through loans and guarantees, reaches as many businesses in the need as possible. “
Business Secretary Alok Sharma added: “The coronavirus has taken a heavy toll on businesses of all sizes across the UK.
“The expansion of this program will provide large businesses with the support they need during the pandemic, helping to provide job security for thousands of people and protect our economy.”
With the lockdown extension running for at least another three weeks, companies are keen to ensure they can stay solvent until the economy can return to normal.
The government said the new loans would be 80% state guaranteed and explained that banks should not ask for personal guarantees on loans below £ 250,000.
For all of the above, the government said, “Personal warranty claims cannot exceed 20% of losses once all other recoveries have been applied. “
Keith Morgan, Managing Director of British Business Bank, said: ‘The new Coronavirus Large Business Interruption Loan program focuses on a relatively narrow area of the market, but which is of vital importance to the economy. British.
“More funding for viable midsize and larger businesses will help them protect jobs and be in a better position to resume normal operations when the current pandemic subsides.”