Chancellor expands Covid-19 loan scheme for large businesses

A UK government-backed loan scheme for large businesses affected by coronavirus has been expanded to cover all viable firms, including those with annual turnovers over £500m, the chancellor Rishi Sunak announced today. (21.4.20).

Outlining further details of the Coronavirus Large Business Interruption Loans Scheme, Sunak said all firms with a turnover of more than £45m will now be able to apply for up to £25m of finance, and up to £50m for firms with a turnover of more than £250m.

Business with turnovers of more than £500m were originally not eligible for the scheme, which is being set up to help firms who do not qualify for the existing Coronavirus Business Interruption Loan Scheme – for small and medium-sized businesses - and the Bank of England Covid Corporate Financing Facility - for investment grade companies. 

In theory, the move - which comes after extensive consultation with businesses – is designed to ensure more firms are able to benefit from UK government support.

Rishi Sunak, chancellor of the exchequer, 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.”

Alok Sharma, UK government business secretary, said: “Coronavirus has struck a heavy blow against businesses of all sizes across the UK. Expanding this scheme will provide larger firms with the support they need during the pandemic, helping to provide job security to thousands of people and protect our economy.”

The UK government will provide lenders with a guarantee of 80% on each loan, something that ministers expect will give lenders further confidence in continuing to provide finance.

The scheme will be available through a series of accredited lenders, which will be listed on the British Business Bank website.