According to a report by Sky News, the Government is planning to change the terms of the Coronavirus Large Business Interruption Loan Scheme (CLBILS).

The move is intended to stop shareholders and managers excessively benefiting from the cash which is being lent to help companies survive the coronavirus pandemic.

The Coronavirus Large Business Interruption Loan Scheme (CLBILS) supports large businesses, with an annual turnover of more than £45 million.

All viable businesses with turnover of more than £45 million per year can apply for up to £25 million of finance. Firms with a turnover of more than £250 million can apply for up to £50 million of finance.

The loans are repayable over a maximum of three years.

But Sky News claims that ministers are concerned that firms will use the money to bump up dividends paid to shareholders and executive pay.

The Government was criticised in 2008 after Gordon Brown’s government bailed out the banks, only for several lenders, including the Royal Bank of Scotland, to continue to pay out large sums in bonuses.

The British Business Bank (BBB), which administers the various lending schemes introduced to support firms through the pandemic, is understood to have been briefed on the potential changes.

Many of the companies seeking money using CLBILS are privately owned businesses, although some are also listed on the London Stock Exchange.

According to data published last week, 59 companies have been lent a total of £359m under the scheme so far.

It is understood that if they go ahead, the CLBILS restrictions on dividends and share buybacks will apply only to loans made above the previous ceiling of £50m. Under the scheme, banks are accredited by the British Business Bank to issue loans, with the government providing an 80% guarantee.

Sky suggested that Chancellor Rishi Sunak may announce the changes to CLBIS early this week.

The loans have already been the subject of several revisions. The  maximum size of the loans has been upped from £50m to £200m while the eligibility threshold for companies has gone up from £45m to £250m.

Lenders accredited to issue loans under CLBILS include Barclays, HSBC, Lloyds Banking Group and NatWest.

Many FTSE-100 companies, including BT Group and Royal Dutch Shell, have axed or cut dividends during the coronavirus crisis.

The Government have yet to confirm or deny that new conditions will be attached to the business loans.