Sunak Extends U.K. Virus Loan Program to Larger Companies
Sunak Extends U.K. Virus Loan Program to Larger Companies
(Bloomberg) -- U.K. Chancellor of the Exchequer Rishi Sunak widened one of the government’s coronavirus business aid programs to cover all companies with revenue of more than 45 million pounds ($56 million).
The Coronavirus Large Business Interruption Loan Scheme originally excluded firms with sales of more than 500 million pounds, but, after consultation with business, that cap has been lifted.
U.K.’s Private Credit Firms Scramble to Secure Government Aid
Originally, the only government aid available to the largest firms was a corporate financing facility open to those with an investment-grade credit rating, a requirement that excluded some mid-sized U.K. companies.
“I want to ensure that no viable business slips through our safety net of support,” Sunak said in an e-mailed statement. “That is why we are expanding this generous scheme for larger firms.”
The plan will see the government give an 80% guarantee to banks on the loans. Companies with sales of more than 45 million pounds can apply for as much as 25 million pounds of finance, while those with revenue exceeding 250 million pounds can get up to 50 million pounds.
The move is part of Sunak’s unprecedented 330 billion pounds of loan guarantees aimed at ensuring as many U.K. companies as possible survive the lockdown. On Thursday, the government confirmed this would last at least another three weeks.
Some of Europe’s largest private credit firms lobbied the government to expand its loan-backed guarantee scheme to ensure that businesses in their portfolios benefit, according to a letter seen by Bloomberg.
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