The Treasury is considering raising the limit of the Coronavirus Large Business Interruption Loan Scheme (CLBILS), to support mid-sized firms during the public health crisis.
At the moment, firms with turnover of more than £250m can apply for up to £50m in state-backed loans.
According to The Financial Times, ministers are mooting raising the £50m limit to £200m.
However, some larger companies have warned that £50m will not be enough to get them through this downturn. Last month British steelmaker Tata Steel called for the UK to lift the £50m cap and announced it is seeking hundreds of millions of pounds to see it through the crisis.
“The problem with just increasing the limit is it’s really hard to know what the appropriate amount will be because we don’t know when we will be out of this crisis and things will return to normal,” said Daniel Rajkumar, managing director of Rebuildingsociety.
“For some businesses that won’t be enough.
“In my view CLBILS and the Coronavirus Business Interruption Loan Scheme (CBILS), should support businesses to cover their operational expenditure every month until revenues return to normal. So, I think it needs to be variable.”
Data released by the British Business Bank (BBB) this week showed that there had been 358 applications for CLBILS, but just 59 loans had been approved, totalling £359m.
This is a comparatively small figure compared to the government’s other support schemes.
The BBB data also revealed that 36,000 loans worth over £6bn have been facilitated through CBILS which caters for firms with turnover under £45m, and 268,000 Bounce Back Loans worth £8.3bn have been approved for smaller firms.