Ministers are this weekend preparing to overhaul an emergency loan programme for larger companies whose future has been put at risk of collapse by the COVID-19 pandemic.

Sky News has learnt that the Treasury is drawing up plans to double the interest-free sums available to businesses under the Coronavirus Large Business Interruption Loan Scheme (CLBILS) to £50m.

Under the proposals, which are set to be signed off by Rishi Sunak, the chancellor, government-guaranteed loans of between £25m and £50m would be available to companies with turnover of more than £250m.

That would represent a change from the terms announced when the scheme was unveiled on 3 April, which said the upper threshold for lending would be £25m for companies with sales of between £45m and £500m.

Sources said on Sunday that the Treasury was also likely to remove the upper £500m turnover threshold in an effort to help even larger companies – described as ‘the stranded middle – which cannot access a separate funding initiative operated by the Bank of England because they do not possess an investment grade credit rating.

The revised terms are not yet finalised but could be announced by Mr Sunak as soon as this week, according to insiders.

The CLBILS scheme is the larger version of the Coronavirus Business Interruption Loan Scheme, which is targeted at small and medium-sized companies with a maximum turnover of £45m.

CBILS has itself already been overhauled since its launch, with participating banks agreeing to stop demanding personal guarantees from SME customers, and Mr Sunak abolishing a requirement for lenders to first evaluate SMEs’ eligibility for other corporate loan products.

Speaking to Sky News’ Sophy Ridge on Sunday programme, Alok Sharma, business secretary, said that £800m had been lent so far under CBILS to 4200 companies.

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