Covid-19 loan schemes give businesses £15 billion boost

Figures announced by the Chancellor today show the banking and finance industry has provided almost £15 billion to over 304,000 businesses so far through the three major government-backed lending schemes.

Lenders are working hard to provide support under the schemes to businesses of all sizes, with the Bounce Back Loan scheme (BBL) targeted at sole traders and small firms, the Coronavirus Business Interruption Loan Scheme (CBILS) for small and medium sized enterprises (SMEs) and the Coronavirus Large Business Interruption Loan Scheme (CLBILS) for larger businesses.

A total of £8.378 billion has been approved to 268,173 businesses through the BBL scheme in the week since it launched. This is an average of over 38,000 loans being approved each day, as bank staff work tirelessly to meet unprecedented demand and deliver support to those firms who need it.

Lenders have provided £6.094 billion to 35,919 businesses so far through the CBIL scheme. Following reforms to the scheme announced by the Treasury and British Business Bank, lenders have worked to streamline the application process while enabling those firms who have applied but would qualify for a Bounce Back Loan to switch their facility.

Figures for the CLBIL scheme show lenders approved £359 million to 59 mid-sized and larger UK businesses. The number of applications is lower than for CBILS and BBLS but the average value of each loan is higher at over £6 million, reflecting that this scheme is targeted at a smaller number of companies with a turnover of over £45 million eligible for this scheme.

Bank staff have been credited for working hard to get these schemes up and running at short notice and enhance processes where necessary to get money to businesses as swiftly as possible.

The number of accredited lenders under the CBIL and BBL schemes continues to rise, meaning businesses can access support from a wide variety of lenders, from high street banks to alternative finance providers.3

These government-backed schemes are just one aspect of the range of measures available to businesses from the banking and finance sector. The extensive support includes working capital extensions, overdraft extensions, capital repayment holidays and asset-based finance, allowing businesses to access the right support that suits their needs.

Stephen Jones, Chief Executive of UK Finance, said: “The banking and finance industry is determined to play its part in helping businesses of all sizes get through these tough times.

“Bank staff are working tirelessly to get financing quickly to those firms who need it, with almost £15 billion of lending provided to over 304,000 businesses through government-backed schemes so far.

“This forms part of the industry’s broad package of support for businesses including commercial lending, capital repayment holidays, extended overdrafts and asset-based finance.

“It’s important to remember that any lending provided under government-backed schemes is a debt not a grant, and so firms should carefully consider their ability to repay before applying.”

For more information on the Bounce Back Loan Scheme and its alternatives, see this useful guide