Government plots fresh overhaul of emergency coronavirus loans

The Treasury plans to double the interest-free sums available to companies under the Coronavirus Large Business Interruption Loan Scheme (CLBILS) from £25m to £50m, according to Sky News.

Companies with a turnover of more than £250m would be eligible to apply for the increased sums under new proposals set to be signed off by Chancellor Rishi Sunak.

It would mark a change from the previous terms unveiled by the government at the start of April. Then, it said that companies with sales of between £45m and £500m could borrow up to £25m.

The Treasury looks poised to remove that £500m turnover threshold in a bid to help even larger firms that cannot access Bank of England funding because they do not have an investment-grade credit rating.

If the revised loan terms are unveiled this week as expected, they come as a boon to a number of businesses that feared falling through the cracks of the government’s loan schemes.

As previously reported by Retail Week, leaders of mid-sized businesses have warned that they face a “ticking time bomb” if they are not given access to the loans.

Executives cautioned that they feared being left “stuck in the middle” of the government’s support packages without access to vital funding that could prevent their companies going bust.

Smaller businesses have been given access to the coronavirus business interruption loan scheme (CBILS), offering them the ability to borrow up to £5m interest-free for 12 months, while only larger companies with high credit ratings are currently able to apply for the Bank of England’s Covid-19 corporate financing facility.