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Lending facility for larger firms - coronavirus

Updated 30 September 2020: ICAEW's Corporate Finance Faculty explains the Bank of England’s direct lending facility for larger businesses, the Covid Corporate Financing Facility (CCFF), which is open for applications via banks. Options are available for businesses without a credit rating. Early repayment is available.


Purpose of facility

To provide working capital to businesses suffering severe disruption to cash flows so that they can pay short term liabilities, for example, wages and suppliers.

UPDATE September: The CCFF will close for new purchases from eligible companies after 22 March 2021.

Key features of facility

The Bank of England will, via the CCFF, buy short-term debt from larger companies.

The debt will be in the form of sterling-denominated commercial paper and:

  • is short term – with a maturity of one week to twelve months;
  • is of investment grade – where available, a credit rating of A-3 / P-3 / F-3 / R3 from at least one of Standard & Poor’s, Moody’s, Fitch and DBRS Morningstar as at 1 March 2020;
  • is issued directly into Euroclear and/or Clearstream; and
  • does not have non-standard features and is issued using ICMA market standard documentation.

UPDATE 23 April: Businesses without a credit rating can consider the options below.

UPDATE 19 May: Businesses that wish to borrow money beyond 12 months from 19 May 2021 or that have approved an increase in their CCFF limit, over and above that suggested by their investment rating, must provide a letter to HM Treasury that commits them to restrictions on:

  • dividend payments and other capital distributions;
  • senior pay; and
  • share buy-backs.

Early repayment: Businesses that have drawn under the CCFF may repay their drawings early if they choose to do so. Early repayment fees will be waived until end June 2020.

UPDATE 22 September: Companies can apply to become eligible until 31 December 2020.

Eligible companies

A company that can apply for funding will:

  • be a non- financial company
  • be UK incorporated, including companies with foreign-incorporated parents
  • have a genuine business in the UK
  • have significant employment in the UK
  • have their headquarters in the UK
  • be able to demonstrate that it was in sound financial health prior to the impact of the coronavirus

A company may also need to demonstrate that it:

  • generates significant revenues in the UK
  • serves a large number of customers in the UK or
  • has a number of operating sites in the UK

A company does not need to have issued commercial paper prior to using the CCFF.

UPDATE 23 April: A company that does not have a credit rating may still be eligible for CCFF if it can satisfy one of the following two criteria:

  • The company has three investment-grade bank ratings and no speculative ratings as at 1 March 2020 OR two ratings and is viewed as ‘strongly investment grade’ AND can, if required to do so, submit confirmation of the ratings from the banks and attest that all bank ratings related to its principal direct on-balance sheet borrowings have been disclosed.
  • The company can seek an assessment of credit quality from one of the major credit rating agencies, as at 1 March 2020, noting that the rating is for the purpose of using the CCFF.

For more details, such as what counts as suitable evidence of credit status, consult the Bank of England’s Q&A.

UPDATE 19 May: Beginning on 4 June, the Bank of England will publish the names of businesses that have drawn under the CCFF, together with the amounts borrowed.

Banks that are able to assist

Not all banks issue commercial paper.

Check here for a list of banks that are able to assist.

Additional information