The government has extended the maximum loan size available through the Coronavirus Large Business Interruption Loan Scheme (CLBILS) from £50m to £200M, but with restrictions placed on dividend and bonus payments by borrowers.
The expanded loans will be available from 26th May 2020. They are intended to help ensure large firms who do not qualify for the Bank of England’s Covid Corporate Financing Facility (CCFF) have enough finance to meet cashflow needs during the outbreak. Any businesses borrowing more than £50M through CLBILS will be subject to restrictions on dividend payments, senior pay and share buy-backs during the period of the loan, including a ban on dividend payments and cash bonuses, except where they were previously agreed.
These restrictions will also apply to CCFF participants who wish to borrow money beyond 12 months from today. The Bank will also publish a list of companies who have benefitted under CCFF from the scheme on 4th June.
Under the new arrangements, CLBILS applicants will be able to borrow up to the lower of 25% of turnover or £200M. Lenders who wish to offer larger loans will need to undergo further accreditation checks. The restrictions in place mean borrowers cannot make any dividend payments and will need to agree any share buybacks.
If you need further advice to support your business through these challenging times, please contact your usual team manager, or use the Contact Us form on our website at: https://www.affordbond.co.uk/contact
Afford Bond continue to offer a full and uninterrupted accounting service during the current lockdown measures.