This weekend it was reported that ministers were preparing to overhaul the emergency loan programme for larger companies. The future of large businesses has been put at risk of collapse by the COVID-19 pandemic, as many experts fear the economy will plummet to World War II levels.
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Now, from Monday, firms can apply for loans accredited by the British Business Bank, through the Coronavirus Large Business Interruption Loan Scheme (CLBILS).
Companies with sales between £45m and £250m will be able to apply for the short-term loans and financial support of up to £25m.
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This is for companies who have been forced to halt operations or been impacted by the coronavirus loackdown measures.
Larger firms with sales of more than £250m will also be able to access the support.
Rishi Sunak has announced new measures to help large businesses (Image: GETTY)
From Monday, firms can apply for loans accredited by the British Business Bank, through the Coronavirus Large Business Interruption Loan Scheme (Image: GETTY)
Companies known to have borrowed from the scheme include both EasyJet and Greggs.
The Treasury has now decided to allow companies which are majority-owned by major private equity groups to access CLBILS on an individual basis, Sky News reported.
The government said the new loans would be 80% guaranteed by the state.
However, banks must not request personal guarantees on any loans under £250,000.
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The government said the new loans would be 80% guaranteed by the state (Image: GETTY)
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For anything above, “claims on personal guarantees cannot exceed 20% of losses after all other recoveries have been applied”.
Rishi Sunak said: “I want to ensure that no viable business slips through our safety net of support as we help protect jobs and the economy.
“That is why we are expanding this generous scheme for larger firms.
“This is a national effort and we’ll continue to work with the financial services sector to ensure that our £330bn of government support, through loans and guarantees, reaches as many businesses in need as possible.”
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Business Secretary Alok Sharma said expanding the scheme would provide larger firms with the support they need during the pandemic (Image: GETTY)
Companies with sales between £45m and £250m will be able to apply for the short-term loans and financial support of up to £25m (Image: GETTY)
Business Secretary Alok Sharma has also been showing his support for the scheme.
Mr Sharma said expanding the scheme would “provide larger firms with the support they need during the pandemic, helping to provide job security to thousands of people and protect our economy”.
Keith Morgan, chief executive of British Business Bank, said: “The new Coronavirus Large Business Interruption Loan Scheme focuses on a relatively narrow area of the market, but one that is vitally important to the UK economy.
“More finance for viable mid-sized and larger firms will help them protect jobs and be in a better position to resume normal business when the current pandemic subsides.”
Social distancing (Image: EXPRESS)
It is hoped the news will reassure businesses following yesterday’s news that the UK’s COVID-19 lockdown will continue for at least another three weeks.
Businesses will be eager to make sure they can keep their heads above water until the economy gets back to normality.
Foreign Secretary Dominic Raab announced an extra three weeks of lockdown yesterday, where he said “The UK is providing a leading role and working very closely with all of our international colleagues.”
However, he made it clear it won’t be “business as usual” with China after the lockdown is lifted.
Companies known to have borrowed from the scheme include both EasyJet and Greggs (Image: getty)
While taking questions from the press, Mr Raab said: “I think there absolutely needs to be a very, very deep dive after the event review of the lessons – including of the outbreak of the virus – and I don’t think we can flinch from that at all.
“It needs to be driven by the science.”
He added: “So we ought to look at all sides of this and do it in a balanced way.
“But there is no doubt we can’t have business as usual after this crisis, and we will have to ask the hard questions about how it came about and how it couldn’t have been stopped earlier.”