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Bigger companies in need of financial support are now able to apply for loans up to £200 million under Coronavirus Large Business Interruption Loan Scheme, however, recipients will be restrained from paying dividends or pay rises to senior staff.

The government has extended the scheme the loan size available under the scheme from £50 million to a maximum of £200 million in a bid to support organisations that have been hit hard by the pandemic but are not eligible for the Bank of England’s COVID Corporate Financing Facility (CCFF).

Borrowers under the boosted scheme will be able to borrow up to 25 per cent of turnover – up to a maximum of £200 million.

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It is hoped that the expanded loans will provide enough finance to large companies to meet cashflow needs during the coronavirus pandemic.

Available from the 26th May, companies borrowing more than £50 million through the CLBILS will be required to adhere to several conditions, including not paying dividend payments or cash bonuses, expect where they were previously agreed.

In addition, companies borrowing under the initiative will not be able to raise the pay of senior management, including the board, apart from circumstances where pay rises were agreed prior to the CLBILS loan being taken out.

These same restrictions will also apply to CCFF participants wishing to borrow money beyond 12 months, with the Bank of England set to publish the list of companies benefitting from the CCFF on the 4th June.

Click here to see the full range of support offered to businesses during the coronavirus pandemic

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