Businesses welcome extension of Government coronavirus aid to larger firms
Businesses have welcomed the extension of a Government coronavirus support scheme to help larger compannies.
The Government announced on Tuesday that it would be extending maximum loan size available through the Coronavirus Large Business Interruption Loan Scheme from £50mn to £200m.
Now loans under the expanded scheme will be made available to large businesses affected by coronavirus from next week
But the changes also mean companies receiving help through CLBILS and the Bank of England’s Coronavirus Corporate Financing Fund will be asked to agree to not pay dividends and to exercise restraint on senior pay.
The CLBILS scheme was introduced last month by Chancellor Rishi Sunak to support companies with sales of between £45 million and £250 million.
It was introduced for firms who are ineligible for the Coronavirus Business Interruption Loan Scheme (CBILS) intended for smaller firms, and the Bank of England’s Covid Corporate Financing Facility (CCFF), which has been accessed by very large firms, such as easyJet.
John Glen, the Economic Secretary to the Treasury, said: We’re determined to support businesses of all sizes throughout this crisis and our loans and guarantees have already provided over £32 billion to thousands of firms.
"Today we’re increasing the maximum loan to £200 million to make sure companies get the help they need."
His department said that businesses had benefitted from over £32bn in loans and guarantees to support their cashflow during the crisis.
This included 268,000 Bounce Back Loans worth £8.3bn, 36,000 loans worth over £6bn through the Coronavirus Business Interruption Loan Scheme, and £359m through the Coronavirus Large Business Interruption Loan Scheme, alongside £18.7bn through the the Bank of England’s Covid Corporate Financing Facility.
Suren Thiru, head of economics at the British Chamber of Commerce, said: “It is good to see the Government continue to listen to business concerns and make improvements to existing schemes.
“These important changes could make a real difference to larger firms in particular and, alongside the other lending support schemes, will help ensure that more businesses of all sizes get access to the finance they need to help weather this unprecedented economic storm.”
Stephen Jones, CEO of UK Finance, said: “Ensuring businesses of all sizes access the financial support they need during these tough times is a common goal shared by Government, banks and regulators.
"The banking and finance industry welcomes HM Treasury’s reforms to CLBILS, extending the maximum loan size available from £50m to £200m to help support larger business affected by coronavirus alongside the Bank of England’s Coronavirus Corporate Financing Fund (CCFF).
“Over the last seven weeks, the industry has worked tirelessly to get money to those viable businesses that need help with firms and sole traders of all shapes and sizes accessing billions of pounds in loans. These government-backed schemes are just one aspect of the range of measures available to businesses from the banking and finance sector."