Changes to the Government’s Coronavirus Large Business Interruption Loan Scheme (CLBILS) will give larger car retail businesses access to a £200 million COVID-19 survival boost.
An announcement by HM Treasury today (May 19) revealed that the scheme, which currently allows businesses with a turnover of up to £250m access to loans of up to £50m, will been extended from next week.
It comes amid fears surrounding the survival hopes of certain larger UK businesses.
The expanded loans, which Treasury said had been introduced following discussions with lenders and business groups, will be available from May 26.
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 £200m to make sure companies get the help they need.”
Restrictions to the CBILS schemes dictate that borrowers will be able to borrow up to 25% of turnover, up to a maximum of £200m.
Lenders who wish to offer larger loans will need to undergo further accreditation checks.
Today’s statement added: “Companies 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 that wish to borrow money beyond 12 months from today.
“This will ensure that the money is used to keep the company going through the crisis. The Bank will also publish a list of companies who have benefitted under CCFF on June 4.”
So far, businesses have benefitted from over £32bn in loans and guarantees to support their cashflow during the crisis, according to Treasury data.
This includes 268,000 Bounce Back Loans worth £8.3bn, 36,000 loans worth over £6bn through CLBILS, and £359m through CBILS, alongside £18.7bn through the CCFF.
Yesterday (May 18) AM reported that car retailers who have sought government support during the COVID-19 lockdown period were being warned to be on their guard as scammers posing as the HMRC launched an opportunistic fraud campaign.
In the latest of its regular updates seeking to guide retailers through various coronavirus-triggered challenges in the sector, ASE warned that fraudsters are taking advantage of people’s anxiety and changes in normal routine and procedures to target both individuals and businesses.
It said that, with the first claims now submitted for both the Government Coronavirus Job Retention Scheme (CJRS) and Self-Employment Income Support Scheme, it was now “the perfect time for scammers to contact you pretending to be HMRC”.
“Any unsolicited contact should be verified by visiting the gov.uk website or contacting us for further advice," ASE said.